Definity Financial Corp. (DFY) AI Stock Analysis

• Market Cap: C$7.99B
• Dividend Yield: 1.05%
• Average Volume (3M): 203.62K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.55
• Revenue Growth: 19.80%
• EPS Growth: -12.93%
• Country: CA
• Employees: 3,442
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 1.03
• Shares Outstanding: 121,600,000
• 10 Day Avg. Volume: 244,361
• 30 Day Avg. Volume: 203,623
• PEG Ratio: 0.67
• Price to Book (P/B): 2.02
• Price to Sales (P/S): 1.48
• P/FCF Ratio: 28.97
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$80.33
• Price Target Upside: 16.45% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 76 Outperform
• Price Target: C$76.00 ▲(10.18% Upside)

Definity Financial Corp. has a strong financial foundation and positive earnings call sentiment, which are the most significant factors driving the score. The technical analysis suggests caution due to bearish momentum, and the valuation is moderate. The absence of notable corporate events further emphasizes the importance of financial performance and earnings call insights in the overall assessment.

Positive Factors

Strong Underwriting Performance

The company's strong underwriting performance indicates effective risk management and operational efficiency, contributing to sustained profitability and competitive advantage in the insurance sector.

Book Value Growth

A significant increase in book value reflects strong financial health and effective capital management, enhancing shareholder value and providing a buffer against market volatility.

Cash Flow Growth

Sustained growth in free cash flow indicates robust cash generation ability, supporting reinvestment in business operations and strategic initiatives, while maintaining financial flexibility.

Negative Factors

Slowing Revenue Growth

A slowdown in revenue growth could signal challenges in market expansion or competitive pressures, potentially impacting long-term growth prospects if not addressed.

Challenges in Personal Auto Growth

Challenges in personal auto growth due to rate increases may impact competitiveness and market share, affecting future revenue streams in this segment.

Competitive Pressure in Commercial Segment

Increased competition in the commercial segment could pressure margins and limit growth opportunities, necessitating strategic adjustments to maintain market position.

Definity Financial Corp. Business Overview & Revenue Model

Company Description

Definity Financial Corp. (DFY) is a Canadian insurance and financial services company that operates primarily in the property and casualty insurance sector. The company focuses on providing a range of insurance products including personal and commercial auto insurance, home insurance, and various business-related insurance solutions. With an emphasis on technology and innovation, Definity aims to enhance customer experience and streamline its service delivery across its offerings.

How the Company Makes Money

Definity Financial Corp. generates revenue primarily through the underwriting of insurance policies. The company collects premiums from policyholders, which constitutes a significant portion of its income. Additionally, Definity invests the premiums it receives in various financial instruments, generating investment income. The company also benefits from economies of scale and operational efficiencies as it expands its customer base and product offerings. Key revenue streams include direct insurance premiums, reinsurance agreements, and investment returns. Strategic partnerships with technology firms enhance its capabilities to offer competitive products, thereby contributing to its financial performance.

Definity Financial Corp. Financial Statement Overview

Summary

Definity Financial Corp. demonstrates solid financial health with strong profitability, efficient operations, and a robust balance sheet. The company has managed to grow its revenue and maintain healthy margins, although the pace of revenue growth has slowed. The balance sheet is well-managed with low leverage, and cash flow generation is strong, though there is room for improvement in converting net income to free cash flow.

Income Statement

Definity Financial Corp. shows strong revenue growth with a TTM (Trailing-Twelve-Months) revenue growth rate of 3.6% and consistent profitability. The gross profit margin is robust at 42.2%, and the net profit margin has improved to 10.7% in the TTM. The EBIT and EBITDA margins are healthy, indicating efficient operations. However, the revenue growth rate has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.039, reflecting conservative leverage. Return on equity is strong at 11.5%, demonstrating effective use of shareholder funds. The equity ratio is stable, indicating a strong capital base. However, the slight increase in debt over the years should be monitored.

Cash Flow

Cash flow performance is commendable with a 10.3% growth in free cash flow in the TTM. The operating cash flow to net income ratio is strong, although the free cash flow to net income ratio is slightly below 1, suggesting room for improvement in cash generation relative to net income. The company has shown resilience in maintaining positive cash flow growth, despite fluctuations in previous years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.65B	4.53B	3.91B	3.25B	2.92B	2.70B
Gross Profit	1.54B	4.53B	3.93B	3.25B	2.92B	2.70B
EBITDA	673.10M	713.60M	578.30M	165.20M	335.70M	252.40M
Net Income	388.50M	430.40M	350.10M	252.00M	213.20M	153.90M
Balance Sheet
Total Assets	8.30B	7.69B	7.26B	8.32B	7.89B	6.62B
Cash, Cash Equivalents and Short-Term Investments	659.70M	504.90M	197.50M	2.99B	3.59B	2.91B
Total Debt	146.70M	149.50M	149.90M	70.80M	18.90M	21.70M
Total Liabilities	4.30B	4.19B	4.25B	5.84B	5.50B	4.80B
Stockholders Equity	3.76B	3.32B	2.85B	2.37B	2.40B	1.82B
Cash Flow
Free Cash Flow	338.80M	231.60M	264.30M	166.10M	605.80M	447.40M
Operating Cash Flow	423.90M	307.20M	351.80M	256.90M	655.20M	490.20M
Investing Cash Flow	-717.50M	-298.00M	-351.90M	-374.70M	-1.04B	-74.60M
Financing Cash Flow	292.70M	-113.80M	-61.00M	73.40M	376.80M	0.00

Definity Financial Corp. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 68.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DFY, the sentiment is Positive. The current price of 68.98 is above the 20-day moving average (MA) of 66.47, below the 50-day MA of 69.70, and above the 200-day MA of 68.40, indicating a neutral trend. The MACD of -0.24 indicates Negative momentum. The RSI at 55.56 is Neutral, neither overbought nor oversold. The STOCH value of 74.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:DFY.

Definity Financial Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IFC	77 Outperform	C$47.29B	20.32	16.27%	1.88%	2.51%	44.44%
ONEX	77 Outperform	C$8.11B	11.52	5.15%	0.36%	2.46%	-27.48%
DFY	76 Outperform	C$7.99B	19.37	13.44%	1.05%	19.80%	-12.93%
FFH	75 Outperform	$52.82B	7.35	18.65%	0.98%	10.08%	24.18%
ELF	73 Outperform	C$5.85B	4.77	15.46%	896.45%	-23.51%	1.19%
IAG	73 Outperform	C$15.47B	15.51	14.34%	2.27%	-25.13%	16.40%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

Definity Financial Corp. Corporate Events

Definity Financial Corp. Reports Strong Q3 2025 Results and Secures Financing for Major Acquisition

Definity Financial Corp. reported a robust third quarter for 2025, with a 7.5% growth in gross written premiums and a record operating net income of $125.2 million. The company’s financial position is strong, with shareholders’ equity surpassing $4 billion for the first time, and it has successfully secured financing for its acquisition of Travelers’ Canadian operations, which is expected to close in early 2026. The results reflect improved operational efficiency, lower-than-expected catastrophe losses, and strong investment and distribution income, positioning Definity well for future growth.

The most recent analyst rating on (TSE:DFY) stock is a Hold with a C$74.00 price target. To see the full list of analyst forecasts on Definity Financial Corp. stock, see the TSE:DFY Stock Forecast page.

Definity Financial Announces $1 Billion Private Placement to Fund Acquisition

Definity Financial Corporation announced a $1 billion private placement of senior unsecured notes in two series to accredited investors in Canada. The proceeds from this placement are intended to fund part of the acquisition of the Canadian operations of The Travelers Companies, Inc. This strategic move is expected to strengthen Definity’s market position in the Canadian insurance industry. The private placement is co-led by RBC Capital Markets and TD Securities and is subject to customary conditions, with an expected closing date of September 12, 2025.

The most recent analyst rating on (TSE:DFY) stock is a Buy with a C$81.00 price target. To see the full list of analyst forecasts on Definity Financial Corp. stock, see the TSE:DFY Stock Forecast page.