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IGM Financial (TSE:IGM)
TSX:IGM

IGM Financial (IGM) AI Stock Analysis

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IGM Financial

(TSX:IGM)

Rating:76Outperform
Price Target:
C$50.00
▲(13.92%Upside)
IGM Financial is robust with strong profitability and an appealing valuation. While technical indicators are positive, challenges in revenue growth and liquidity warrant attention. Positive earnings call highlights and strategic investments suggest a stable outlook with potential for upside.
Positive Factors
Institutional Asset Growth
An additional $1 billion in institutional assets under management is expected to be onboarded in the second quarter.
Institutional Wins
The company achieved a significant institutional win with a $4 billion Q1/25 sub-advisory contract.
Strategic Share Buybacks
Elevated share buybacks are consistent with management's strategic plan to reduce share count.
Negative Factors
Competitive Pressures
There are continued competitive pressures in the mature and saturated Canadian market, where banks have inherent scale and distribution advantages.
Earnings Performance
The company's adjusted EPS was below expectations due to lower net asset management fees and higher operational expenses.
Market Conditions
Uncertain market conditions result in a Market Perform rating being maintained.

IGM Financial (IGM) vs. iShares MSCI Canada ETF (EWC)

IGM Financial Business Overview & Revenue Model

Company DescriptionIGM Financial Inc. operates as a wealth and asset management company in Canada. It operates through Wealth Management, Asset Management, and Strategic Investments and Other segments. The company offers financial advisory services; IG Living Plan that provides financial planning services, such as investment vehicles, insurance products, mortgage and banking solutions, and charitable giving program; IG Wealth Management Advisor Portal, a customer relationship management platform; and IG Wealth Management's dealer platform, which provides increased automation and supports both MFDA and IIROC licensed advisors, as well as new products on its investment dealer platform. It also provides mutual funds; portfolios; IG Advisory Account, a fee-based account that enhances client experience by offering the ability to simplify and consolidate selected investments into a single account; iProfile Private portfolios, a portfolio management program for households with investments; iProfile Portfolios, a suite of four managed solutions; segregated funds; separately managed and fee-based brokerage accounts; insurance products; and securities services. In addition, the company offers management and related services; global private equity, private credit, and infrastructure investment solutions; and exchange traded funds. The company was incorporated in 1978 and is headquartered in Winnipeg, Canada. IGM Financial Inc. is a subsidiary of Power Financial Corporation.
How the Company Makes MoneyIGM Financial makes money through a diversified revenue model primarily centered around asset management and financial advisory services. The company earns management fees based on the assets under management (AUM) across its various funds and investment products. Additionally, IGM generates revenue through advisory fees for financial planning and wealth management services provided to individual and institutional clients. The company's subsidiaries, such as Mackenzie Investments, contribute significantly to revenue by offering a broad range of investment products, including mutual funds and ETFs. Key partnerships and distribution channels enhance IGM's market reach and client base, further supporting its earnings. Performance fees and commissions on investment products also play a role in the company's revenue generation.

IGM Financial Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: -0.97%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call reflected robust growth in client assets and strategic investments, with record-breaking earnings. However, market volatility and challenges in retail sales and M&A activities presented areas of concern.
Q1-2025 Updates
Positive Updates
Record-Breaking Q1 Earnings
Adjusted earnings per share reached a first-quarter record of $1, with core businesses achieving record high client assets.
Significant Growth in Client Assets
Client assets grew by 19% year-over-year, surpassing $0.5 trillion for the first time.
Strong Performance in Wealth Management
IG Wealth ended the quarter with $141.5 billion AUA, up 11% year-over-year. Record gross inflows and net inflows of $718 million were achieved.
Positive Institutional Sales
Mackenzie achieved net sales of $3.4 billion in Q1, with a strong contribution from institutional awards.
Growth in Strategic Investments
ChinaAMC's investment funds grew by 27% year-over-year, and Northleaf delivered consecutive quarters of $1 billion in fundraising.
Negative Updates
Market Volatility Impact
April was marked by significant volatility, leading to a 2% decline in assets compared to the end of March.
Challenges in Retail Sales
Retail net redemptions remained in line with last year despite an 11% increase in gross sales, indicating room for improvement in retail flows.
M&A and Asset Management Slowdown
Rockefeller's M&A business and asset management growth were slower than expected, impacting profitability targets.
Company Guidance
During the IGM Financial First Quarter 2025 Analyst Call, the company reported robust financial performance, setting a record with an adjusted earnings per share of $1. Key metrics highlighted include a 19% year-over-year growth in client assets, surpassing $0.5 trillion, driven by strategic investments and strong performance from core businesses IG Wealth and Mackenzie, both achieving record high client assets. The balance sheet remains strong with unallocated capital exceeding $600 million. Despite market volatility, net inflows for IG Wealth were $718 million, with gross inflows totaling $4.2 billion and gross sales of $4.9 billion. Mackenzie Investments saw a 7% increase in AUM to $219 billion, with net sales of $3.4 billion in Q1. Additionally, Wealthsimple and Rockefeller reported significant asset growth, with Wealthsimple's AUA increasing by 89% year-over-year. Operational highlights include a focus on expanding private asset offerings and maintaining strategic investments, all while navigating a complex economic landscape.

IGM Financial Financial Statement Overview

Summary
IGM Financial shows strong profitability with high net profit margins and ROE. However, stagnant revenue growth and declining free cash flow indicate potential risks. The balance sheet is stable, but liquidity has slightly decreased.
Income Statement
72
Positive
IGM Financial's TTM (Trailing-Twelve-Months) revenue shows a slight increase to CAD 3.51 billion compared to the previous year. The gross profit margin stands at 41.42%, and the net profit margin is 26.90%, indicating robust profitability. However, a decrease in gross profit from CAD 1.70 billion in 2024 to CAD 1.45 billion in the TTM period highlights potential challenges in cost management or revenue generation. Revenue growth is stagnant, but EBIT and EBITDA margins remain healthy at 32.35% and 38.63%, respectively.
Balance Sheet
68
Positive
The company's debt-to-equity ratio is 0.96, reflecting a balanced approach to leveraging, though slightly high for the asset management industry. Return on Equity (ROE) in the TTM period is strong at 11.97%, showcasing efficient equity utilization. The equity ratio is 38.97%, indicating a solid base of equity relative to total assets. However, a decrease in cash and short-term investments from CAD 2.26 billion in 2024 to CAD 2.14 billion in the TTM period suggests reduced liquidity.
Cash Flow
75
Positive
IGM Financial's TTM free cash flow stands at CAD 970.88 million, a slight decrease from CAD 1.03 billion in 2024. The operating cash flow to net income ratio is healthy at 1.16, indicating strong cash generation relative to earnings. The free cash flow to net income ratio is 1.03, which is indicative of efficient cash management. However, the free cash flow growth rate is negative due to a decrease from the previous period, highlighting potential cash flow pressures.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.51B3.49B3.70B3.46B3.59B3.15B
Gross Profit
1.45B1.70B1.43B1.61B3.25B2.87B
EBIT
1.13B1.13B1.41B1.24B1.38B1.08B
EBITDA
1.36B1.43B1.36B1.20B1.48B1.16B
Net Income Common Stockholders
943.91M933.51M1.15B867.24M978.95M764.41M
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.14B2.26B686.85M1.68B2.58B1.36B
Total Assets
20.23B20.68B18.66B18.87B17.66B16.06B
Total Debt
7.59B7.59B7.26B6.90B7.36B8.46B
Net Debt
6.82B6.68B6.71B5.83B6.06B7.69B
Total Liabilities
12.27B12.81B11.94B12.61B11.16B11.02B
Stockholders Equity
7.88B7.80B6.66B6.20B6.45B4.99B
Cash FlowFree Cash Flow
970.88M1.03B683.50M592.89M857.67M628.83M
Operating Cash Flow
1.09B1.15B837.28M737.67M943.59M736.63M
Investing Cash Flow
-504.86M-473.77M-1.16B134.71M1.10B673.38M
Financing Cash Flow
-314.06M-313.42M-203.77M-1.09B-1.52B-1.36B

IGM Financial Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price43.89
Price Trends
50DMA
43.37
Positive
100DMA
43.84
Positive
200DMA
42.92
Positive
Market Momentum
MACD
0.20
Positive
RSI
48.54
Neutral
STOCH
28.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:IGM, the sentiment is Neutral. The current price of 43.89 is below the 20-day moving average (MA) of 44.23, above the 50-day MA of 43.37, and above the 200-day MA of 42.92, indicating a neutral trend. The MACD of 0.20 indicates Positive momentum. The RSI at 48.54 is Neutral, neither overbought nor oversold. The STOCH value of 28.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:IGM.

IGM 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
80
Outperform
C$783.30M7.928.68%3.92%20.65%-2.36%
TSCVG
77
Outperform
C$1.03B8.1810.69%0.14%120.44%
TSIGM
76
Outperform
$10.38B11.0312.84%5.01%-3.85%-4.41%
72
Outperform
C$7.31B12.265.40%0.38%-10.83%-34.83%
TSGCG
70
Outperform
C$1.00B14.175.62%3.60%35.78%-24.67%
64
Neutral
$12.85B9.817.59%16985.65%12.30%-7.71%
$2.87B-247.20%0.84%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:IGM
IGM Financial
43.89
8.42
23.73%
TSE:AGF.B
AGF Management B NV
12.00
3.83
46.88%
TSE:CVG
Clairvest
71.92
3.86
5.67%
TSE:GCG
Guardian Capital
41.70
-1.43
-3.32%
TSE:ONEX
ONEX Corporation
106.03
9.11
9.40%
BBUC
Brookfield Business Corp. Class A
29.64
9.81
49.47%

IGM Financial Corporate Events

Executive/Board ChangesShareholder Meetings
IGM Financial Inc. Elects Directors at Annual Meeting
Positive
May 9, 2025

IGM Financial Inc. announced the election of its directors during the Annual Meeting of Shareholders, with all nominees listed in the management proxy circular being elected by a majority vote. This election reinforces the company’s governance structure and supports its strategic initiatives in the wealth and asset management industry, potentially impacting stakeholders positively by ensuring experienced leadership continues to guide the company.

Business Operations and StrategyFinancial Disclosures
IGM Financial Achieves Record First Quarter Earnings in 2025
Positive
May 8, 2025

IGM Financial Inc. reported record high first quarter earnings for 2025, with adjusted net earnings reaching $237.8 million, a 5.9% increase from the previous year. The company’s assets under management and advisement also hit a record high of $275 billion, driven by strong performances from IG Wealth Management and Mackenzie Investments. This growth reflects a significant improvement in net inflows and strategic investments, positioning IGM Financial favorably in the market.

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.