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iA Financial Corporation Inc (TSE:IAG)
TSX:IAG
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iA Financial Corporation Inc
(TSX:IAG)
66Neutral
Positive Factors
Financial Performance
Increased target price multiple reflects continued solid growth and profitability, with core EPS growth in line with medium-term targets.
Sales Performance
Sales are strong, with significant increases in Canadian insurance and U.S. dealer services and insurance sales.
Negative Factors
Earnings
Reported EPS was weaker due to higher one-off/unusual items and actuarial assumption changes, despite some offsetting benefits.
iA Financial Corporation Inc (IAG) vs. S&P 500 (SPY)
Market Cap
C$11.56B
Dividend Yield2.78%
Average Volume (3M)370.73K
Price to Earnings (P/E)12.6
Beta (1Y)1.10
Revenue Growth-17.69%
EPS Growth29.19%
CountryCA
Employees9,400
SectorFinancial
Sector Strength77
IndustryInsurance
Share Statistics
EPS (TTM)9.83
Shares Outstanding93,305,046
10 Day Avg. Volume439,664
30 Day Avg. Volume370,728
Financial Highlights & Ratios
PEG Ratio0.43
Price to Book (P/B)N/A
Price to Sales (P/S)1.07
Price to Cash Flow (P/CF)-4.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$145.14Price Target Upside14.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
iA Financial Corporation Inc Business Overview & Revenue Model
Company DescriptioniA Financial Corporation Inc (IAG) is a leading Canadian insurance and wealth management company. It operates in various sectors, including life and health insurance, wealth management, mutual funds, group insurance, and auto and home insurance. The company's core products and services cater to individuals, businesses, and institutions, providing comprehensive financial solutions to meet diverse client needs.
How the Company Makes MoneyiA Financial Corporation Inc generates revenue primarily through the sale of insurance products and wealth management services. Key revenue streams include premiums collected from life and health insurance policies, fees and commissions from wealth management and mutual fund services, and premiums from group insurance and auto and home insurance products. The company also earns investment income from its portfolio of invested assets, which supports its insurance liabilities and contributes to overall profitability. Strategic partnerships with financial advisors, brokers, and affinity groups enhance distribution capabilities, further driving sales and earnings.
iA Financial Corporation Inc Financial Statement Overview
Summary
iA Financial Corporation Inc shows robust revenue growth and efficient cash flow management. However, challenges like negative EBIT margins and a low equity ratio indicate areas for improvement.Income Statement
iA Financial Corporation Inc has shown a strong improvement in revenue growth, with a significant increase in total revenue from 2023 to 2024. The gross profit margin remains consistent as the entire revenue is considered gross profit. However, the EBIT margin is absent due to EBIT being zero or negative in previous years, indicating potential operational challenges. EBITDA margin is healthy at 13.9% for 2024, showing efficient cost management.72
Positive
Balance Sheet
The company's balance sheet demonstrates a stable equity position with a rising stockholder's equity over the years. The debt-to-equity ratio is fairly low at 0.28, indicating prudent leverage management. However, the equity ratio of 6.8% suggests a low proportion of assets financed by equity, which could be a potential risk.68
Positive
Cash Flow
Operating cash flow has seen a decline from 2023 to 2024, but free cash flow remains positive, albeit with a reduction. The free cash flow to net income ratio is robust, indicating efficient conversion of income to cash flow. However, the free cash flow growth rate is negative, which could raise concerns about future cash generation.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.58B | 7.93B | 6.55B | 15.51B | 17.70B | Gross Profit |
| 11.58B | 11.23B | 6.55B | 15.51B | 17.70B | EBIT |
| 0.00 | 7.93B | 1.02B | -1.18B | -1.23B | EBITDA |
| 1.61B | 1.38B | 799.00M | 1.39B | 998.00M | Net Income Common Stockholders |
| 962.00M | 789.00M | 800.00M | 859.00M | 632.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.57B | 1.38B | 1.36B | 1.55B | 1.95B | Total Assets |
| 109.86B | 93.85B | 87.42B | 94.66B | 86.47B | Total Debt |
| 2.09B | 1.87B | 2.07B | 1.65B | 1.67B | Net Debt |
| 520.00M | 489.00M | 708.00M | 100.00M | -284.00M | Total Liabilities |
| 102.39B | 86.81B | 80.28B | 87.41B | 79.95B | Stockholders Equity |
| 7.47B | 7.04B | 7.14B | 7.25B | 6.51B |
| Cash Flow | Free Cash Flow | |||
| 763.00M | 1.06B | 326.00M | -63.00M | 1.68B | Operating Cash Flow |
| 1.04B | 1.34B | 613.00M | 185.00M | 1.86B | Investing Cash Flow |
| -491.00M | -307.00M | -287.00M | -294.00M | -1.14B | Financing Cash Flow |
| -397.00M | -1.01B | -525.00M | -294.00M | 111.00M |
iA Financial Corporation Inc Technical Analysis
Neutral
126.36
Price Trends
130.17
Negative
128.62
Negative
112.14
Positive
Market Momentum
-1.35
Positive
45.55
Neutral
18.16
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:IAG, the sentiment is Neutral. The current price of 126.36 is below the 20-day moving average (MA) of 129.41, below the 50-day MA of 130.17, and above the 200-day MA of 112.14, indicating a neutral trend. The MACD of -1.35 indicates Positive momentum. The RSI at 45.55 is Neutral, neither overbought nor oversold. The STOCH value of 18.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:IAG.
iA Financial Corporation Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $71.15B | 14.45 | 11.03% | 4.08% | 7.64% | 9.22% | |
73 Outperform | $43.79B | 8.25 | 16.48% | 1.14% | 13.82% | -6.68% | |
72 Outperform | $44.64B | 14.80 | 12.87% | 4.39% | -12.72% | -0.16% | |
71 Outperform | C$30.88B | 14.65 | 10.36% | 4.67% | 30.81% | -2.47% | |
69 Neutral | C$47.63B | 12.46 | 15.52% | 4.34% | -2.40% | 42.24% | |
66 Neutral | C$11.56B | 12.62 | 13.26% | 2.78% | -17.69% | 29.19% | |
64 Neutral | $13.79B | 10.52 | 9.20% | 4.24% | 17.25% | -7.60% |
* Financial Sector Average
Performance Comparison
TSE:IAG
iA Financial Corporation Inc
126.36
42.12
50.00%
TSE:SLF
Sun Life Financial
78.38
7.66
10.83%
TSE:MFC
Manulife Financial
42.06
10.66
33.94%
TSE:FFH
Fairfax Financial Holdings
1,926.11
429.89
28.73%
TSE:GWO
Great-West Lifeco
51.13
10.04
24.43%
TSE:POW
Power Corp of Canada
48.19
11.60
31.70%
iA Financial Corporation Inc Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -4.27% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with record profitability, significant growth in both Canada and U.S. operations, and a robust capital position. However, there are some concerns regarding provisions for outstanding balances in the U.S. and credit experience losses. The overall sentiment is positive, as highlights significantly outweigh the lowlights.Highlights
Record Profitability Achieved in Q4
Core EPS reached $3.04, a 30% increase year-over-year, with core ROE at 16.9% for the quarter.
Strong Sales and Growth in U.S. Operations
U.S. Individual Insurance sales totaled US$68 million, a 55% increase year-over-year, and Dealer Services sales reached US$274 million, a 21% increase.
Impressive Growth in Wealth Management
Gross sales of seg funds achieved a quarterly record high of nearly $1.6 billion, marking an 87% increase year-over-year, with net inflows of nearly $1 billion.
Robust Capital Position
Solvency ratio stood at 139%, well above the operating target, with organic capital generation of $150 million in Q4.
Successful Year-End Performance
Core earnings surpassed $1 billion for 2024, with a 22% increase in premiums and deposits and an 18% increase in assets under management.
Lowlights
Provision for Outstanding Balances in U.S.
A $16 million provision was made for outstanding balances related to accounts receivable in U.S. operations, reflecting management actions and prudent risk management.
Credit Experience Loss
There was a $7 million loss in credit experience due to higher impacts from downgrades than upgrades in the investment portfolio and increased allowance for credit losses at iA Auto Finance.
Non-core Adjustments Impacting Net Income
Non-core adjustments led to a lower net income of $220 million, with adjustments for favorable market variations, year-end assumption review, and specific items like tax adjustments and software write-downs.
Company Guidance
During the Industrial Alliance Financial Group's Fourth Quarter 2024 Earnings Results Conference Call, significant achievements were highlighted, demonstrating the company's strong financial performance and strategic growth. The core earnings per share (EPS) reached a record high of $3.04, marking a substantial 30% increase year-over-year. Core return on equity (ROE) stood at 16.9% on a quarterly annualized basis. Sales momentum was robust, with premiums and deposits soaring by 39% year-over-year, while assets under management and administration grew by 18%. The company's solvency ratio remained strong at 139%, supported by an organic capital generation of $150 million in Q4. Additionally, the book value per share increased by 10% year-over-year, or 13% excluding the impact of share buybacks. The U.S. operations also showed remarkable growth, with Individual Insurance sales rising by 55% and Dealer Services sales up by 21% year-over-year. Overall, iA Financial Group's performance in 2024 was exceptional, driven by a 20% increase in core EPS and strategic capital deployment, setting a solid foundation for continued growth into 2025.iA Financial Corporation Inc Corporate Events
Business Operations and Strategy
iA Financial Group Completes Redemption of Debentures
Positive
Feb 21, 2025
iA Financial Corporation Inc. has redeemed its 2.400% Subordinated Debentures due in 2030, offering a redemption price above the principal, reflecting its strategic financial management. This action may enhance the company’s financial flexibility and demonstrate its commitment to effective capital management, potentially strengthening its market position and investor confidence.
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
iA Financial Group Achieves Strong 2024 Results, Expands Market Presence
Positive
Feb 18, 2025
iA Financial Group reported strong financial results for the fourth quarter and full year of 2024, achieving all its market guidance targets. The company posted a 30% year-over-year increase in core earnings per share for the fourth quarter, driven by robust sales momentum and business diversification. The company recorded over $5.7 billion in premiums and deposits, while its solvency ratio stood at a strong 139%. Additionally, iA Financial Group acquired Global Warranty, enhancing its presence in the used vehicle warranty market in Canada. This performance underscores the company’s solid foundation, prudent financial management, and commitment to creating shareholder value, positioning it well for further growth in the coming years.
Dividends
iA Financial Corporation Inc. Declares Quarterly Dividend
Positive
Feb 18, 2025
iA Financial Corporation Inc. announced a quarterly dividend of $0.9000 per common share for the quarter ending December 31, 2024, payable on March 17, 2025. This announcement highlights the company’s continued commitment to returning value to its shareholders and could strengthen its position in the financial markets.
Business Operations and Strategy
iA Financial Group Proposes Ernst & Young as New External Auditor
Neutral
Jan 28, 2025
iA Financial Corporation Inc. has announced the proposal of Ernst & Young LLP as its external auditor for the 2026 financial year, following a comprehensive tender process conducted in 2024. This change is part of iA Financial’s commitment to strong governance practices, and a transition process will take place in 2025 to ensure a smooth handover of audit responsibilities. Deloitte will continue as the auditor for 2025, pending shareholder approval, with the switch to EY aligning with the company’s strategic governance framework.
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.