Higher premiums from personal lines and commercial business also drove revenue 6.2% higher in the most recent quarter.
What’s more, a 10% dividend increase and sharply higher earnings signal a strong future ahead. The shares are up 20.7% this year and 119.1% over the last five years – both measures outperformed the S&P500. We see no reason for things to change, therefor this remains a strong buy for the long run.
Meanwhile, the stock trades at 15.5 times the company’s forward earnings forecast.
INTACT FINANCIAL CORP. (Toronto symbol IFC; www.intactfc.com) is Canada’s largest property and casualty insurance provider. The company insures more than five million individuals and businesses. Intact Insurance, Canada BrokerLink and belairdirect are its major brands.
In a bid to add value for investors, the company acquired OneBeacon Insurance Group for $1.7 billion U.S. in September 2017. The Minnesota-based insurance holding company focuses on property-casualty coverage. Through its businesses, the firm provides a range of specialty insurance products.
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OneBeacon represents Intact’s entry into the U.S. market to drive its future growth. Still expanding beyond its home market carried risk. The firm is nonetheless turning out to be a great fit for Intact, which has successfully integrated a number of acquisitions in the past few years.
Expanding by acquisition also adds risk, but specialty insurance policies generally carry higher premiums. Insurers offering specialty lines typically underwrite more difficult and unusual risks or higher-risk accounts. That includes insuring anyone from architects and engineers to clients in the marine, sports, and entertainment industries.
Blue Chip Stocks: Revenue and income rise while the valuation remains reasonable
Meanwhile, in June 2021, Intact completed the acquisition of casualty insurer RSA Insurance in partnership with Tryg A/S, one of the leading non-life insurers in Scandinavia. RSA offers a range of general and specialty insurance products and had long been seen as a takeover target.
Under the transaction, Intact kept RSA’s Canadian, U.K. and international operations, while Tryg got RSA’s Swedish and Norwegian businesses. The partners paid a total of $12.3 billion for RSA—$5.1 billion from Intact and $7.2 billion from Tryg.
RSA’s Denmark business remained jointly owned by the two firms, but last year they sold the unit for $2.52 billion. Intact received 50% of the proceeds.
With the March 2024 payment, the company raised your quarterly dividend by 10.0%, to $1.21 a share from $1.10. The annual rate of $4.40 yields a solid 2.0%.
In the quarter ended March 31, 2024, the insurer collected $5.11 billion in premiums, up 6.2% from $4.81 billion a year earlier. Premiums were higher due to solid results from both its personal lines and commercial business. Intact’s net operating income also rose 20.7%, to $648 million, or $3.63 a share, from $537 million, or $3.06 a share.
In 2024, the company will probably earn $14.79 a share (excluding unusual items). The stock trades at a moderate 15.5 times that estimate.
Recommendation in Dividend Advisor: Intact Financial Corp. is a buy.
