and when you are done doing that, take a looksy at their last annual report. This company is a cash cow. They make 100s of millions of dollars and need almost none of it to re-invest in their own business. It can all go to dividends, acquisitions and uh... well more dividends.Originally Posted by OhGreatGuru
By the way, they do advertise. The have a registered trademark on
"The Plan". Remember those ads.
Yet it hard to argue with the stock, which has done quite well. Lots of people want mutual funds without doing the work themselves.
The stock is a cash cow. It generates a ton of FCF. Has a fantastic dividend. Moderate low debt. A FCF/payout of 61% (could be lower but not terrible). Good ROE. It has a lot of great qualities hard to find in Canadian companies. Its assets under management increased from '08 to '09 to '10 and has decreased slightly from 2010 numbers. I don't think it unreasonable given the extreme market volatility, that AUM would have decreased slightly (125b Nov/2010 to 121b Nov/2011). The company has a history of increasing its dividends and buying back its shares. It's hard to say whether ETFs will negatively impact IGMs future but I think I would side in favour of the average person still not being independent or confident enough to invest for themselves, rather buying traditional MFs.
The company's size has to give them a reasonable advantage over its competition in marketing. And the costs of selling out of your MF's and leaving the company has to give them a "stickiness". Is that enough of a durable competitive advantage to equal a moat?
I think this stock is very close to buy a for me.
IGM is big part of Power Corp. that owns several insurance company's.
Power reports in U.S. dollars.
They also own very large European insurance company. So that's exposure to the euro and all it's problems.
Still believe IGM and Power to be very good buys will just be little hard on nerves.
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