Dan Rohinton Intact Financial IFC-T BUY Jan 03, 2025

Very strong second quarter. Still grows earnings at a sustainable high teens rate, impressive. Combined ratio is ~87%. Modest dampening enthusiasm due to its richer valuation at 17.5x earnings, compared to its average of 15.5x.

Likes this segment in P&C. Represents value. Will do well in falling interest rate environment, though some interest rate yields moving higher, which has affected this type of name. 

Rich valuation, but can't deny how well it's done. Consistently profitable on combined ratio (premiums in, minus claims and expenses). Huge market share. He owns CB instead.

Somewhat sheltered from macro noise and tariffs. Big beneficiary of AI, right now, in underwriting and efficiencies. Great ROE of 16%, even with severe weather and elevated losses in the last year. Quality name, great compounder. 

Can really start to surface value with RSA acquisition in UK. Trades at 14.7x on 2026 earnings, growing at 12.6% -- a bit over 1 on PEG, but you get there if you add the dividend. Yield is 1.9%.

All the insurance names, both in Canada and the US, continue to work. If interest rates do, in fact, go higher, that will only be beneficial for lifecos and other insurers. The chart looks fantastic. Good run, so there is some weakening in the intermediate term.

If a long-term holding, best thing you can do is sit on your hands and do nothing except participate in the DRIP program. Especially if he's right on the broader call of rates being 8-10% in the secular bear market of 2030-40, should be a big tailwind for insurers.

EPS growth rate is 18% this and next year, strong. They lead the industry in growth.

EPS of $4.93 beat estimates of $4.18 and revenues of $5.76B missed estiamtes of $5.93B. Its combined ratio was solid at 86.5%, mostly due to solid underlying results across all lines of business. Its ROE was 16.5%, and it incurred $1.5B in catastrophe losses from several natural disasters over the past year. There were no mentions of the LA wildfires in its earnings. As a shareholder, we would be very pleased with these results and the market seems to like the results. It trades at 17.5X forward earnings, on the higher end of its historical average, but the company continues to execute and both margins and free cash flow are great. We would be comfortable slowly averaging in here for a long-term hold.
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Earnings per share growth rate this year and next year is 18%. Wait for a pullback.

Just raised dividend again for about the 20th year in a row. Very strong Q4 underwriting, despite a year of catastrophic losses, shows how resilient the business model is. Great 16.5% ROE. Bit pricey here at 16x for 10% growth. Slightly overbought, buy on pullback.