iA Financial Corporation Inc (IAG) AI Stock Analysis

Compare

252 Followers

Top Page

iA Financial Corporation Inc

(TSX:IAG)

Rating:77Outperform

Price Target:

C$161.00

▲(15.27%Upside)

iA Financial Corporation Inc is well-positioned in the insurance industry, demonstrating strong financial performance with effective cash management and profitability. While the technical outlook is neutral, the stock is reasonably valued, offering potential for income generation. Strong results from the earnings call reinforce confidence in the company's growth trajectory, despite some operational risks and macroeconomic challenges.

Positive Factors

Earnings Performance

Q4 results reflect good quality beat, as core EPS beats consensus estimates, indicating strong performance.

Stock Valuation

Increased target price multiple reflects continued solid growth and profitability.

Negative Factors

Financial Results

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. iShares MSCI Canada ETF (EWC)

Market Cap

C$13.05B

Dividend Yield2.52%

Average Volume (3M)260.84K

Price to Earnings (P/E)14.8

Beta (1Y)1.19

Revenue Growth-7.31%

EPS Growth28.65%

CountryCA

Employees7,000

SectorFinancial

Sector Strength83

IndustryInsurance - Diversified

Share Statistics

EPS (TTM)2.91

Shares Outstanding93,079,895

10 Day Avg. Volume349,184

30 Day Avg. Volume260,838

Financial Highlights & Ratios

PEG Ratio-3.90

Price to Book (P/B)1.75

Price to Sales (P/S)0.00

P/FCF Ratio6.32

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$142.00

Price Target Upside1.67% Upside

Rating ConsensusHold

Number of Analyst Covering4

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 through a diverse range of sectors including individual insurance, group insurance, savings and retirement, and investment management. iA Financial Corp. offers a comprehensive suite of products and services tailored to meet the needs of individuals and businesses, including life and health insurance, mutual and segregated funds, and pension plans.

How the Company Makes MoneyiA Financial Corporation Inc generates revenue primarily through the sale of insurance products and wealth management services. The company earns premiums from its various insurance offerings, including life, health, and disability insurance. Additionally, iA Financial Corp. generates management fees and commissions from its investment and wealth management operations, which include mutual funds and segregated funds. The company also benefits from its group insurance segment, providing employee benefits and pension solutions to businesses. Key revenue streams are further supported by strategic partnerships and an extensive distribution network, which enhance their market reach and customer base.

iA Financial Corporation Inc Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 4.54%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong growth in sales, core EPS, and ROE, alongside a robust capital position and successful strategic initiatives. However, challenges such as a decline in net income and macroeconomic uncertainties affecting the Investment segment and U.S. Dealer Services present potential risks. Overall, the positive aspects of growth and capital management outweigh the concerns.

Q1-2025 Updates

Positive Updates

Strong Core EPS and ROE Growth

Core EPS increased by 19% year-over-year to $2.91, and core ROE stands at 16.1%, progressing towards the 2027 target of 17% plus.

Record Sales in Canada and U.S.

Sales in both Canada and the U.S. were strong, contributing to a 19% year-over-year growth in premiums and deposits and a 15% increase in assets under management and administration.

Robust Capital Position

The company's solvency ratio stands at 132%, supported by organic capital generation and disciplined capital management.

Impressive U.S. Dealer Services Performance

U.S. Dealer Services first quarter sales increased by 23% to USD 306 million, driven by effective growth strategies and expansion of distribution channels.

Outstanding Seg Fund Sales

Gross seg fund sales increased by 52% year-over-year to $1.9 billion, with net sales amounting to nearly $1.2 billion.

Successful Capital Deployment

Capital available for deployment was $1.4 billion, with strategic initiatives including the acquisition of Global Warranty and share buybacks.

Negative Updates

Decline in Net Income

Net income decreased by 20% year-over-year due to macroeconomic fluctuations affecting the Investment segment.

Decrease in Group Savings and Retirement Sales

Sales in Group Savings and Retirement totaled $841 million, reflecting an 8% decrease compared to the previous year.

Challenges in U.S. Market

U.S. Dealer Services may face potential volatility due to the pull-forward effect of sales and macroeconomic uncertainties, which could impact future earnings.

Impact of Macroeconomic Variations

Ongoing macroeconomic variations have impacted organic capital generation, as seen in the last two quarters.

Company Guidance

During the Industrial Alliance Financial Group's first quarter 2025 earnings call, the company announced a robust 19% year-over-year increase in core earnings per share (EPS), reaching $2.91, and a core return on equity (ROE) of 16.1%, progressing towards a target of 17% plus by 2027. The firm reported a 19% growth in premiums and deposits and a 15% increase in assets under management and administration, marking the fourth consecutive quarter of double-digit growth in these areas. The solvency ratio stood at 132%, supported by $125 million in organic capital generation. Book value per share rose by 8% year-over-year, or nearly 11% excluding the impact of the normal course issuer bid (NCIB). Sales in Canada and the U.S. were strong, with notable increases in individual insurance and dealer services. The U.S. operations saw a significant 62% increase in individual insurance sales and a 23% rise in dealer services sales. Despite the macroeconomic fluctuations affecting the investment segment, the overall net income for other segments grew by 14% year-over-year. The company remained focused on disciplined capital deployment, with $1.4 billion available for strategic initiatives, including acquisitions and IT investments. The leadership emphasized the importance of their diversified business model and extensive distribution network in navigating economic uncertainties and achieving long-term growth targets.

iA Financial Corporation Inc Financial Statement Overview

Summary

iA Financial Corporation Inc demonstrates a solid financial position with strong cash flow generation and improved profitability. Despite a decline in revenue, the company has enhanced its net income, reflecting efficient cost management. The balance sheet remains stable with a healthy equity base and manageable debt levels. Overall, the company is well-positioned financially, though it should focus on improving revenue growth and operating margins.

Income Statement

Positive

The company has shown improvement in its gross profit margin and net profit margin over the TTM, indicating efficient operations and cost management. Although revenue has decreased in the TTM compared to the previous annual report, the net income has increased, suggesting better profitability. However, the EBIT margin declined significantly, which may indicate pressure on operating income.

Balance Sheet

Positive

The company's balance sheet shows a solid equity base with a manageable debt level, as indicated by a favorable debt-to-equity ratio. The equity ratio remains stable, reflecting a good proportion of equity financing. However, given the industry context, the ROE is moderate, suggesting room for improvement in generating returns from equity.

Cash Flow

Very Positive

The cash flow analysis reveals a strong free cash flow growth in the TTM, indicating effective cash management and operational efficiency. The operating cash flow to net income ratio is robust, highlighting strong cash generation relative to accounting profits. However, the free cash flow to net income ratio suggests potential fluctuations in free cash flow generation.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
10.17B	11.58B	7.93B	6.55B	15.51B	17.70B
	Gross Profit
8.66B	11.58B	11.23B	6.55B	15.51B	17.70B
	EBIT
469.00M	1.23B	7.93B	1.02B	-1.18B	-1.23B
	EBITDA
1.52B	1.61B	1.38B	799.00M	1.39B	998.00M
	Net Income Common Stockholders
923.00M	962.00M	789.00M	800.00M	859.00M	632.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.38B	1.57B	1.38B	1.36B	1.55B	1.95B
	Total Assets
91.53B	109.86B	93.85B	87.42B	94.66B	86.47B
	Total Debt
1.88B	2.09B	1.87B	2.07B	1.65B	1.67B
	Net Debt
1.04B	520.00M	489.00M	708.00M	100.00M	-284.00M
	Total Liabilities
84.50B	102.39B	86.81B	80.28B	87.41B	79.95B
	Stockholders Equity
7.04B	7.47B	7.04B	7.14B	7.25B	6.51B
Cash Flow		Free Cash Flow
2.09B	763.00M	1.06B	326.00M	-63.00M	1.68B
	Operating Cash Flow
2.36B	1.04B	1.34B	613.00M	185.00M	1.86B
	Investing Cash Flow
-1.36B	-491.00M	-307.00M	-287.00M	-294.00M	-1.14B
	Financing Cash Flow
-694.00M	-397.00M	-1.01B	-525.00M	-294.00M	111.00M

iA Financial Corporation Inc Technical Analysis

Technical Analysis Sentiment

Positive

Last Price139.67

Price Trends

50DMA

133.34

Positive

100DMA

131.27

Positive

200DMA

124.53

Positive

Market Momentum

MACD

2.34

Positive

RSI

58.30

Neutral

STOCH

27.12

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:IAG, the sentiment is Positive. The current price of 139.67 is above the 20-day moving average (MA) of 138.50, above the 50-day MA of 133.34, and above the 200-day MA of 124.53, indicating a bullish trend. The MACD of 2.34 indicates Positive momentum. The RSI at 58.30 is Neutral, neither overbought nor oversold. The STOCH value of 27.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
MFC	78 Outperform	$75.12B	16.49	10.17%	3.75%	5.24%	13.68%
IAG	77 Outperform	C$13.05B	14.79	12.54%	2.52%	-7.31%	28.65%
IFC	76 Outperform	C$55.27B	25.01	12.95%	1.60%	4.73%	44.14%
SLF	74 Outperform	$50.35B	16.25	13.18%	3.70%	0.94%	3.50%
POW	72 Outperform	C$33.13B	12.27	11.92%	4.45%	7.63%	8.84%
GWO	67 Neutral	C$47.76B	12.45	14.65%	4.43%	17.48%	25.54%
Sector *	64 Neutral	$12.80B	9.71	7.59%	16985.66%	12.07%	-7.53%

* Financial Sector Average

Performance Comparison

TSE:IAG

iA Financial Corporation Inc

139.67

54.91

64.78%

TSE:SLF

Sun Life Financial

89.10

24.32

37.55%

TSE:MFC

Manulife Financial

43.83

9.66

28.26%

TSE:GWO

Great-West Lifeco

50.95

12.86

33.76%

TSE:IFC

Intact Financial Corporation

314.77

90.66

40.45%

TSE:POW

Power Corp of Canada

51.74

13.79

36.34%

iA Financial Corporation Inc Corporate Events

Business Operations and StrategyFinancial Disclosures

iA Financial Group Reports Strong Q1 2025 Results with 19% EPS Growth

Positive

May 7, 2025

iA Financial Group reported strong financial results for the first quarter of 2025, with core earnings per share increasing by 19% year-over-year and a robust solvency ratio of 132%. The company attributes its continued profitability and growth to strong sales momentum across its business units in Canada and the U.S., supported by a solid capital position and flexible balance sheet. This performance underscores the strength of iA Financial Group’s diversified business model and positions the company well to achieve its new financial targets.

Dividends

iA Financial Corporation Declares Quarterly Dividend

Positive

May 7, 2025

iA Financial Corporation Inc. has announced a quarterly dividend of $0.9000 per common share for the quarter ending March 31, 2025, payable on June 16, 2025, to shareholders of record by May 23, 2025. This announcement underscores the company’s ongoing commitment to returning value to its shareholders and may impact investor relations positively by encouraging participation in its Dividend Reinvestment and Share Purchase Plan.

Legal ProceedingsRegulatory Filings and Compliance

iA Financial Group Warns Against Discounted Mini-Tender Offer by Ocehan LLC

Negative

May 7, 2025

iA Financial Group has issued a warning to its investors regarding an unsolicited mini-tender offer from Ocehan LLC, which aims to purchase a small percentage of iA Financial’s common shares at a price significantly below the current market value. The offer, which is priced at $93.30 per share, represents a nearly 30% discount to the closing price on the Toronto Stock Exchange as of May 6, 2025. iA Financial Group is not affiliated with Ocehan and advises shareholders to be cautious, review the offer documents thoroughly, and consult with their investment advisors. The company highlights the risks associated with mini-tender offers, which often bypass standard regulatory requirements, potentially leading investors to make uninformed decisions.

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.