Topic: Dividend Stocks

IGM FINANCIAL INC. $48 – Toronto symbol IGM

IGM FINANCIAL INC. $48 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 251.7 million; Market cap: $12.1 billion; Price-to-sales ratio: 4.3; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.igmfinancial.com) is Canada’s largest independent mutual fund company. Power Financial (Toronto symbol PFC) owns 58.7% of IGM.

In the three months ended September 30, 2014, IGM’s earnings rose 13.6%, to $219.7 million, or $0.87 a share. A year earlier, it earned $193.4 million, or $0.77. Revenue increased 12.4%, to $750.2 million from $667.5 million. Gross sales of mutual funds rose 4.4%, while redemptions fell 26.6%.

IGM should earn $3.30 a share in 2014, and the stock trades at a reasonable 14.5 times that forecast. It also raised its dividend by 4.7%. The new rate of $2.25 a share yields 4.7%.

IGM Financial is a buy.

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