INTACT FINANCIAL CORP. $64.30 - Toronto symbol IFC

INTACT FINANCIAL CORP. $64.30 (Toronto symbol IFC; TSINetwork Rating: Speculative) (416-341-1464; www.intactfc.com; Shares outstanding: 129.6 million; Market cap: $8.6 billion; Dividend yield: 2.7%) is Canada’s largest provider of property and casualty insurance, based on premiums.

In the three months ended December 31, 2012, Intact’s revenue rose 7.2%, to $1.69 billion from $1.58 billion a year earlier.

Before one-time items, Intact earned $1.51 a share in the quarter, up 32.5% from $1.14 a share a year earlier. The insurance business was helped by generally favourable weather. The company also saw higher gains on its investments in the latest quarter.

Intact continues to increase its premiums and profit margins. At the same time, reforms in the key Ontario personal auto market are lowering its claims expenses. Intact’s combined ratio, or claims paid out divided by premiums taken in (the lower, the better), improved to 92.1% from 92.7%.

The improved results have prompted the company to raise its quarterly dividend by 10.0%, to $0.44 from $0.40. The shares now yield 2.7%. The stock trades at 10.6 times forecast 2013 earnings of $6.05 a share.

Intact Financial is still a buy.

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