Does IGM Financial Inc.'s (TSE:IGM) Recent Track Record Look Strong?

Simply Wall St
October 04, 2019
Source: Shutterstock

After reading IGM Financial Inc.'s (TSX:IGM) most recent earnings announcement (30 June 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether IGM Financial's performance has been impacted by industry movements. In this article I briefly touch on my key findings.

See our latest analysis for IGM Financial

How Did IGM's Recent Performance Stack Up Against Its Past?

IGM's trailing twelve-month earnings (from 30 June 2019) of CA$731m has jumped 19% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -2.5%, indicating the rate at which IGM is growing has accelerated. What's the driver of this growth? Let's see whether it is only because of industry tailwinds, or if IGM Financial has seen some company-specific growth.

TSX:IGM Income Statement, October 5th 2019
TSX:IGM Income Statement, October 5th 2019

In terms of returns from investment, IGM Financial has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. Furthermore, its return on assets (ROA) of 6.5% is below the CA Capital Markets industry of 8.2%, indicating IGM Financial's are utilized less efficiently. However, its return on capital (ROC), which also accounts for IGM Financial’s debt level, has increased over the past 3 years from 8.3% to 9.3%.

What does this mean?

Though IGM Financial's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn't always indicative of a continued optimistic outlook. There could be variables that are affecting the entire industry hence the high industry growth rate over the same time frame. You should continue to research IGM Financial to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for IGM’s future growth? Take a look at our free research report of analyst consensus for IGM’s outlook.
  2. Financial Health: Are IGM’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.