Intact Financial (IFC-T)

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.

Earnings per share growth rate this year and next year is 18%. Wait for a pullback.

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

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.

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%.

Would recommend buying. Best management in Canadian financial services. Excellent company that is good for long term investors. 

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.

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. 

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.

Depends on what percentage it makes of your portfolio, plus what your cost base is. #1 competitor to DFY is IFC. The industry is consolidating more. DFY might have a leg up on IFC, as DFY is smaller and can buy a few more things in Canada.

Cost inflation and extreme weather give him pause in this area. Both well-run businesses, but inclined to stay away. The sector poses some risks.

In financials, his biggest weight is insurance. His #1 position is FFH in P&C, but MFC is a significant position as well. He also has IFC. This group is behaving well. 

It has good upward momentum but he wouldn't buy at these levels. He is concerned about insurance payments for weather related events. Intact has been able to pass along increasing replacement costs to their clients.

There are a lot of risks out there -- presidential elections, wars, hard landings, soft landings, stagflation. This name has very little sensitivity to the macro. No matter what, can return solid returns from organic growth and M&A. 14x PE, growing 18%. Yield is 2.1%.

Core position. If the A thesis doesn't work, there's a B thesis. Not if it will help your portfolio, but when.

All reinsurance in property & casualty business. Really expensive in Canada. IFC is the monster, DFY is a newer entrant. He owns none of them. Likes the business, but valuation is too high.