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Intact Financial (Perpetual) Preferred Share Series 5 (IFC.PR.E) |
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Author(s)’ disclosure of share ownership: |
Author(s) do not hold shares |
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Last updated: |
16-Apr-20 |
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Share Price At Date of Last Update: |
$21.99 |
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Yield: |
5.9% |
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Currency: |
$ Canadian |
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Generic Rating (This rating does not consider the circumstances of any individual investor and is therefore not specific advice for any individual): |
Buy at $21.99 |
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SUMMARY AND RATING: These Intact Financial non-cumulative (Perpetual) Preferred shares (IFC.PR.E on Toronto) were issued at a price of $25.00 by prospectus dated May 16, 2017 paying 5.20% on a $25.00 amount ($1.30 per year). Note that preferred shares can have customised aspects that affect their value. We have described the features here but we do not guarantee completeness or total accuracy of this description. For more detail consult the prospectus on sedar.com or find under dividends on the Intact Financial site. On April 16, 2020, they closed at $21.99 to yield 5.9% per year. If held in a taxable account, they are eligible for the dividend tax credit. The dividend is non-cumulative (if they skip a dividend due to financial difficulty, you will never get that dividend). The dividend is fixed and will not change as long as these shares are outstanding. Intact Financial can redeem these shares at $26.00 starting on June 30, 2022 until June 30, 2023 when the redemption price drops to $25.75 and then it drops to $25.50 on June 30, 2024 and to $25.25 on June 30, 2025 and to $25.00 for any redemption on or after June 30, 2026. These preferred shares are subject to a market value decline if Intact Financial’ s outlook worsens and there is some potential for dividends to be skipped or for the Bank to go bankrupt with no recovery of this investment. However we suspect that the possibility of such a scenario is quite remote. These sharers could also suffer a market value decline if interest rates rise significantly or they become unpopular with investors for any reason. These preferred shares were initially rated 2 by DBRS on a scale of 1 to 5, where 1 is the strongest. We did not see any indication that the rating has changed. Overall, we would rate these shares a Buy. |
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INSIDER TRADING / INSIDER HOLDING: Apparently no insiders own these shares. |
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Symbol and Exchange: |
IFC.PR.E, Toronto |
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Basis and Limitations of Analysis: The following applies to all the companies rated. Conclusions are based largely on achieved earnings, balance sheet strength, earnings growth trend and industry attractiveness. We undertake a relatively detailed analysis of the published financial statements including growth per share trends and our general view of the industry attractiveness and the company’s growth prospects. Despite this diligence our analysis is subject to limitations including the following examples. We have not met with management or discussed the long term earnings growth prospects with management. We have not reviewed all press releases. We typically have no special expertise or knowledge of the industry. |
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DISCLAIMER: All stock ratings presented are “generic” in nature and do not take into account the unique circumstances and risk tolerance and risk capacity of any individual. The information presented is not a recommendation for any individual to buy or sell any security. The authors are not registered investment advisors and the information presented is not to be considered investment advice to any individual. The reader should consult a registered investment advisor or registered dealer prior to making any investment decision. For ease of writing style the newsletter and articles are often written in the first person. But, legally speaking, all information and opinions are provided by InvestorsFriend Inc. and not by the authors as individuals. The author(s) of this report may have a position, as disclosed in each report. The authors’ positions may subsequently change without notice. |
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