Stock Analysis

What Makes IGM Financial Inc (TSE:IGM) A Great Dividend Stock?

TSX:IGM
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Over the past 10 years IGM Financial Inc (TSX:IGM) has grown its dividend payouts from CA$1.84 to CA$2.25. With a market cap of CA$10.51B, IGM Financial pays out 69.01% of its earnings, leading to a 5.15% yield. Let me elaborate on you why the stock stands out for income investors like myself. See our latest analysis for IGM Financial

What Is A Dividend Rock Star?

It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:

  • It is paying an annual yield above 75% of dividend payers
  • It has paid dividend every year without dramatically reducing payout in the past
  • Its dividend per share amount has increased over the past
  • It can afford to pay the current rate of dividends from its earnings
  • It has the ability to keep paying its dividends going forward
  • High Yield And Dependable

    IGM Financial's dividend yield stands at 5.15%, which is high for Capital Markets stocks. But the real reason IGM Financial stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.

    TSX:IGM Historical Dividend Yield Feb 1st 18
    TSX:IGM Historical Dividend Yield Feb 1st 18
    If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. IGM has increased its DPS from CA$1.84 to CA$2.25 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. IGM Financial has a trailing twelve-month payout ratio of 69.01%, which means that the dividend is covered by earnings. Going forward, analysts expect IGM's payout to remain around the same level at 63.64% of its earnings, which leads to a dividend yield of around 5.39%. In addition to this, EPS should increase to CA$3.37.

    Next Steps:

    IGM Financial's strong dividend attributes make it, without a doubt, a stock dividend investors should be considering for their portfolios. However, given this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three relevant factors you should further research:

    Valuation is complex, but we're helping make it simple.

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    Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.