IGM expands south of the border

Article Excerpt

IGM FINANCIAL INC. $39 is a buy. The mutual fund seller (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 237.8 million; Market cap: $9.3 billion; Price-to-sales ratio: 2.8; Dividend yield: 5.8%; TSINetwork Rating: Above Average; www.igmfinancial.com) is selling its Investment Planning Counsel wealth management business to Great-West Lifeco Inc. (Toronto symbol GWO) for $575 million. The company will use that cash to buy 20.5% of Rockefeller Capital Management for $622 million U.S. That firm provides wealth management services, mainly to high-net-worth clients. That firm has over $100 billion U.S. in assets under administration. IGM expects to complete the purchase by the end of 2023. The transaction helps the company expand its presence outside of Canada, and cross-promote other services to Rockefeller’s wealthy clients. It should also lift IGM earnings by about 7% in 2024 to $4.02 a share. The stock trades at just 9.7 times that forecast. The $2.25 dividend also yields a high 5.8%. IGM Financial is a buy. buy. …