The CEO of IGM believes they have done enough acquisitions, and wants to do a pivot and concentrate more on organic growth. The dividend is good, and secure, B/S good, Price at a wide discount to NAV, The big drawback that I see is that it is much lower in price than it was 10 years ago. Ugh!!! Any "chance in your mind"that his dream could turn to reality.
Thanks, BEN.
IGM's price has been under pressure over the past few years as valuation contracts alongside other financials with concerns on rates, recession, etc. It trades at 10X forward earnings, but sales grew by 9% over the past 12 months, and the company continues to generate positive free cash flow. It has a cash flow yield of roughly 7.2%, it pays a strong yield of 6.4%, and while its price has largely remained flat over the past few years, its total return, including dividends, is 18.7%, representing a 3-year CAGR of 5.9%.
We feel that the financial space can improve this year alongside flatlining or declining rates, improved investor sentiment around the space, and better asset flows. We might expect some price appreciation over the next couple or few years, but largely we would consider this to be an income name.