Professional Documents
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IFC-TSX
Michael Overvelde
Brenna Phelan
Diversified Financials
Analysis
A Market Leader With Consistently Superior Performance With 17% share of the Canadian P&C insurance market, Intact has a
leading domestic market position that provides it with a sustainable
competitive advantage evident in its consistently industry-leading
profitability and growth. The scale and breadth of its operations
provides it with superior operating leverage, underwriting
capabilities, diversification benefits and acquisition opportunities.
Valuation
Our $99.00 target price is based on a 2017E PE of 13.5x, in line with its
one-year average forward PE multiple of 13.6x (but below its current
14.2x multiple) and established at a premium to the average valuation
of large Canadian financial sector peers to account for its relative
earnings growth, defensive investment characteristics, and M&A
optionality. Please see Exhibit 67 on page 48 for more detail.
Adjuste
d
EPS
1Q
Mar
2014A C$1.23
2Q
Jun
C$1.65
3Q
Sep
4Q
Dec
C$1.55 C$1.58
Full
Year
Net
Premiums
Earned
BVPS
C$6.01
C$7,207
C$37.75
2015E
1.38A
1.56A
1.45
1.62
6.01
7,518
40.97
2016E
1.72
1.66
1.63
1.77
6.78
7,809
44.81
2017E
1.86
1.81
1.74
1.95
7.36
8,129
49.00
Analyst
(000s)
Dividend/Yield
Market Perform 3
C$99.00 target price
Current Price ( Sep-24-15 )
Total Return to
Target
52-Week Range
Suitability
C$94.45
7%
C$95.82 C$71.11
Total Return
Key Financial
Metrics
2014A
P/E
15.7x
P/B
2.5x
Adjusted ROE
16.8%
Combined Ratio
92.8%
C$2.12/2.2%
2015E
2016E
2017E
15.7x
13.9x
12.8x
2.4x
2.1x
1.9x
15.2
%
15.8%
15.7%
92.1
%
92.0%
91.9%
Market Data
Market Capitalization (mln)
Current Net Debt
(mln)
Enterprise Value
(mln)
Shares Outstanding (mln,
f.d.)
10 Day Avg Daily Volume
C$12,42
4
C$982
C$13,40
6
131.5
246
Company Description
Intact Financial is Canada's leading
property & casualty insurance company.
Personal auto insurance is its largest line,
with personal property, commercial auto
and commercial P&C its other lines of
business. It operates exclusively in Canada,
with significant presence in markets not
dominated by government-owned auto
insurers.
Please read domestic and foreign disclosure/risk information beginning on page 62 and
Analyst Certification on page 61.
Raymond James Ltd. | 2100 925 West Georgia Street | Vancouver BC Canada V6C 3L2