Want To Invest In Industrial Alliance Insurance and Financial Services Inc (TSE:IAG)? Here's How It Performed Lately

Measuring Industrial Alliance Insurance and Financial Services Inc's (TSX:IAG) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IAG's recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Industrial Alliance Insurance and Financial Services

Was IAG's recent earnings decline indicative of a tough track record?

To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to assess different stocks on a more comparable basis, using the most relevant data points. For Industrial Alliance Insurance and Financial Services, its most recent bottom-line (trailing twelve month) is CA$515.00M, which, against the previous year's level, has plunged by -4.10%. Given that these values may be relatively myopic, I’ve computed an annualized five-year figure for Industrial Alliance Insurance and Financial Services's net income, which stands at CA$356.52M This shows that while earnings declined from the prior year, over a longer period of time, Industrial Alliance Insurance and Financial Services's earnings have been growing on average.

What's enabled this growth? Well, let’s take a look at if it is merely because of industry tailwinds, or if Industrial Alliance Insurance and Financial Services has experienced some company-specific growth. In the last couple of years, Industrial Alliance Insurance and Financial Services increased its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the Canadian insurance industry has been enduring some headwinds over the past twelve months, leading to an average earnings drop of -4.63%. This is a momentous change, given that the industry has been delivering a positive rate of 8.38%, on average, over the past half a decade. This shows that whatever near-term headwind the industry is experiencing, Industrial Alliance Insurance and Financial Services is relatively better-cushioned than its peers.

What does this mean?

Industrial Alliance Insurance and Financial Services's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I suggest you continue to research Industrial Alliance Insurance and Financial Services to get a more holistic view of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for IAG’s future growth? Take a look at our free research report of analyst consensus for IAG’s outlook.
• 2. Financial Health: Is IAG’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 31 December 2017. This may not be consistent with full year annual report figures.

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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.