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E-L Financial Corp. (TSE:ELF)
TSX:ELF

E-L Financial (ELF) AI Stock Analysis

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E-L Financial

(TSX:ELF)

Rating:72Outperform
Price Target:
C$1,741.00
▲(10548.32%Upside)
E-L Financial's overall stock score is driven by its strong financial foundation, characterized by high profitability and low leverage. The stock's attractive valuation with a low P/E ratio further supports a positive outlook. However, technical analysis suggests caution due to overbought signals. The recent corporate events, including a share split and net income decline, present both opportunities and risks that investors should consider.

E-L Financial (ELF) vs. iShares MSCI Canada ETF (EWC)

E-L Financial Business Overview & Revenue Model

Company DescriptionE-L Financial Corporation Limited operates as an investment and insurance holding company in Canada. It operates through two segments, E-L Corporate and Empire Life. The company owns investments in equities and fixed income securities directly and indirectly through pooled funds, closed-end investment companies, and other investment companies. It also underwrites life and health insurance policies, wealth management products, group plans, and financial services, as well as segregated funds, mutual funds, and annuity products to individuals, professionals, and businesses through a network of independent financial advisors, managing general agents, national account firms, mutual fund dealers, and employee benefit brokers and representatives. E-L Financial Corporation Limited was incorporated in 1968 and is headquartered in Toronto, Canada.
How the Company Makes MoneyE-L Financial makes money through its subsidiaries, primarily The Empire Life Insurance Company, which generates revenue from life and health insurance premiums, as well as fees from wealth management and investment products. The company earns investment income from its diversified portfolio, which includes equities, fixed-income securities, and other financial instruments. This investment portfolio is managed to support the insurance operations and enhance shareholder value. Additionally, E-L Financial benefits from strategic partnerships and investments in various sectors, contributing to its overall earnings. The company's financial performance is significantly influenced by factors such as market conditions, interest rates, and insurance underwriting results.

E-L Financial Financial Statement Overview

Summary
E-L Financial demonstrates solid financial performance with high profitability and prudent leverage. The net profit margin and EBIT margin are strong, indicating efficient operations. The balance sheet shows low leverage with a conservative debt-to-equity ratio. Cash flow management is adequate, though cash flow growth has been volatile.
Income Statement
78
Positive
E-L Financial shows a strong profit profile with a healthy net profit margin of 104.72% in TTM, indicative of high profitability. Revenue growth is volatile, with a significant increase post-2022, though it has faced fluctuations over the years. The gross profit margin is strong at 40.75% for TTM, and the EBIT margin is exceptionally high at 169.98%, suggesting efficient core operations.
Balance Sheet
72
Positive
The company maintains a conservative debt-to-equity ratio of 0.07, indicating low leverage. Return on Equity (ROE) is robust at 13.79%, showing effective use of shareholder funds. However, the equity ratio is moderate at 29.29%, suggesting a reliance on liabilities alongside equity for asset financing.
Cash Flow
74
Positive
E-L Financial exhibits strong cash flow management with a solid operating cash flow to net income ratio of 0.36. Free cash flow remains substantial, though the free cash flow growth rate has seen fluctuations. The free cash flow to net income ratio stands at 0.36, indicating adequate cash generation relative to profits.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
1.06B410.70M2.75B-706.98M2.32B2.56B
Gross Profit
430.57M385.34M4.00B-706.98M2.32B2.56B
EBIT
1.80B2.07B2.67B-172.80M1.38B613.70M
EBITDA
1.38B2.09B581.12M-537.11M1.38B775.40M
Net Income Common Stockholders
1.11B1.57B955.28M-327.31M1.17B503.74M
Balance SheetCash, Cash Equivalents and Short-Term Investments
272.97M374.25M445.82M2.04B2.60B427.76M
Total Assets
22.35B28.12B25.76B23.49B26.79B24.95B
Total Debt
798.46M598.87M733.37M702.91M602.16M602.27M
Net Debt
525.50M225.46M292.51M399.97M-33.94M174.51M
Total Liabilities
15.73B18.38B17.50B15.75B18.20B17.29B
Stockholders Equity
5.64B8.47B7.11B6.71B7.32B6.52B
Cash FlowFree Cash Flow
403.65M459.55M736.01M380.95M344.42M321.21M
Operating Cash Flow
403.65M459.55M736.01M397.83M348.10M329.07M
Investing Cash Flow
620.78M-103.11M-386.56M-437.24M202.91M40.12M
Financing Cash Flow
-1.01B-450.18M-211.54M-293.75M-319.12M-244.52M

E-L Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price16.35
Price Trends
50DMA
14.18
Positive
100DMA
13.76
Positive
200DMA
13.03
Positive
Market Momentum
MACD
0.59
Positive
RSI
53.60
Neutral
STOCH
14.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ELF, the sentiment is Positive. The current price of 16.35 is above the 20-day moving average (MA) of 15.91, above the 50-day MA of 14.18, and above the 200-day MA of 13.03, indicating a neutral trend. The MACD of 0.59 indicates Positive momentum. The RSI at 53.60 is Neutral, neither overbought nor oversold. The STOCH value of 14.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ELF.

E-L Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSELF
72
Outperform
C$5.66B5.1714.11%0.92%-25.60%-5.43%
64
Neutral
$12.86B9.797.78%16985.65%12.28%-7.82%
MFMFC
$55.49B16.8610.17%3.69%
SLSLF
$36.86B16.5413.18%3.68%
TSDFY
74
Outperform
C$8.61B20.4013.25%0.90%18.15%18.11%
TSPOW
72
Outperform
C$33.35B12.3611.92%4.41%7.63%8.84%
TSGWO
68
Neutral
C$47.65B12.4614.65%4.43%17.48%25.54%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ELF
E-L Financial
15.88
5.82
57.85%
MFC
Manulife Financial
32.33
7.59
30.68%
SLF
Sun Life Financial
65.06
18.27
39.05%
TSE:GWO
Great-West Lifeco
51.54
12.91
33.42%
TSE:POW
Power Corp of Canada
52.29
15.25
41.17%
TSE:DFY
Definity Financial Corp.
73.58
31.22
73.70%

E-L Financial Corporate Events

Shareholder MeetingsStock Split
E-L Financial Announces Shareholder Meeting Results and Share Split Details
Neutral
May 7, 2025

E-L Financial Corporation Limited announced the results of its 2025 Annual General and Special Meeting of Shareholders. All director nominees were elected, and PricewaterhouseCoopers LLP was reappointed as auditors. Shareholders approved a hundred-for-one share split, which will not alter shareholders’ rights or ownership proportions. The share split will be effective from May 30, 2025, with shares trading on a post-split basis from June 2, 2025.

Stock SplitDividends
E-L Financial Announces Dividends and Share Split
Positive
May 7, 2025

E-L Financial Corporation Limited has announced cash dividends for its preference and common shares, with payments scheduled for July 17, 2025. Additionally, the company will implement a hundred-for-one share split for its common shares, which will begin trading on a post-split basis on June 2, 2025. This move is likely to impact the company’s stock liquidity and attractiveness to investors.

Financial Disclosures
E-L Financial Reports Decline in Q1 2025 Net Income Amid Investment Losses
Negative
May 7, 2025

E-L Financial Corporation Limited reported a decrease in net equity value per common share to $2,216.91 as of March 31, 2025, marking a 5.1% decline from December 2024 but a 4.4% increase from March 2024. The company’s consolidated net income for the first quarter of 2025 was $86 million, a significant drop from $547 million in the same period in 2024, primarily due to a net loss on investments within E-L Corporate. However, Empire Life, the insurance subsidiary, saw improved performance with a net income of $70 million, driven by favorable interest rate changes and improved insurance service results.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.