Opinions Stockchase Insights
CI Financial CorpCIX.TOHOLDMar 27, 2023
Stockchase InsightsStock price when the opinion was issued
As of Aug 14, 2025. Market Open.
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Building US business dramatically, planning to take public sometime in the future. Canadian side is well run, but the mutual funds business hasn't grown in years, perhaps 10% a year. Big dividend. Combining both sides of the business should garner a $35 stock price easily, $50 if they really tried. Yield is 4.6%.
(Analysts’ price target is $19.25)
Richard Fogler
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Premium contentOur PAST TOP PICK with CIX has triggered its stop at $13.50. To remain disciplined, we recommend covering the position at this time. This will result in a net investment loss of 12%, when combined with our previous recommendations.
Premium contentPremium contentWe reiterate this wealth manager of $395 billion of assets as a TOP PICK. I has closed on the 20% divestment of its US wealth business, which as allowed it repurchase over $700 million of its debentures. It trades at 1.6x book and 6x earnings. It pays a good dividend with a payout ratio of 1/3 of its cash flow. We continue to recommend a stop at $12, looking to achieve $18 -- upside potential of 18%. Yield 4.9%
(Analysts’ price target is $18.94)It took on lots of debt at low interest rates which has given it some balance sheet trouble. It has sold some holdings. There isn't growth but debt is OK now. It is exceptionally cheap at 3.9X 2024 earnings. Pays a dividend of 5.6%. He bought some last week.
Greg NewmanIt used to be a great stock and the earnings ratio of 20X has dropped to 5X. It pays a 5% dividend and is buying back stock. The IPO of the U.S. business part is possible. It sold off part of its business to private equity via preferred shares which have a 14% guaranteed annual minimum return.. This could cause losses to common shareholders. He would prefer IGM.
Premium contentCIX just announced a $1.3b sale for 20% of its US wealth management business. This will allow the company to reduce debt and move into new directions. Latest quarterly earnings showed the company building cash reserves, while buying back shares and reducing debt. It trades at 6x earnings and 1.4x book value. It pays a good dividend, backed by a payout ratio under 35% of cash flow. We recommend a stop-loss at $12.00, looking to achieve $19.50 -- upside potential of 18%. Yield 4.5%
(Analysts’ price target is $19.38)
CIX’s fundamental metrics – its Asset under Management (AUM) has been quite resilient amid a challenging macro environment, with growth mainly coming from US wealth management, which management indicates is the key growth lever for the company in the future. In addition, the company has a track record of repurchasing shares aggressively in recent years, which indicates management believes shares are undervalued.
Like other names in the Financial sector, CIX has been under pressure recently due to the fear of contagion risks in the financial systems, as well as weak capital markets. Although there is a contagious sentiment risk, we think this risk is low in probability as the Fed and other countries’ central banks publicly announced their intention to stabilize the Financial system. CIXs is not impacted by deposits, but margins are trending down and business remains competitive. But the stock is priced right, and it has managed a challenging environment well enough and made good acquisitions over time. Overall, we think CIX is a hold.
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