Is it a good company at a reasonable price? If I had this stock in my portfolio I would sell it. The company will be taken over at probably $32.00 so you will not gain much by holding it until the end. I think that it is time for the small investor to move on. I have done this in the past in a similar situation. The result of testing is that the stock price is relatively expensive, but, as I have said, there is a takeover in play.
I do not own this stock of CI Financial Corp (TSX-CIX, NYSE-CIXX). I started to follow this stock originally because it was a Mutual Fund company. People talked about it being easier to make money from buying a Mutual Fund company than buying Mutual Funds. When they became a Unit Trust in 2006, dividends were significantly increased, but these dividends proved to be unsustainable. They changed back to a corporation in 2009 and dividends were decreased in 2010. Since that time, they have been increasing their dividends. In June 2014, MPL communications called this stock a Buy and advised that they were adding it to their list of Key Stock for the Investment reporter. I started to follow this stock in 2009.
When I was updating my spreadsheet, I noticed that the stock jumped in November 2024. This seems to be because Mubadala Capital is buying this company at $32.00 a share. See article on Morningstar. This was first reported in November 2024. They had a loss in 2024 due to higher expenses. Accelerate Holdings is an indirect subsidiary of Mubadala Capital and special meeting is to approve the takeover by Accelerate Holdings.
The current dividend yield is moderate with dividend growth uncertain. The current dividend yield is moderate (2% to 4% ranges) at 2.53%. The 5, 10 and historical median dividend yields are moderate at 3.65%, 3.94% and 3.65%. Since it looks like this stock is going to be bought out, there will probably no further dividend increases.
The Dividend Payout Ratios (DPR) are good. The DPR for 2024 for Earnings per Share (EPS) is too high at 2400% with 5 year coverage at 121%. The DPR for 2024 for Adjusted Earnings per Share (AEPS) is good at 21% with 5 year coverage at 24%. This would be a DPR that counts. The DPR for 2024 for Cash Flow per Share (CFPS) is good at 33% with 5 year coverage at 25%. The DPR for 2024 for Free Cash Flow (FCF) is good at 26% with 5 year coverage at 27%. As usual, there is no agreement on what the FCF is.
| Item | Cur | 5 Years |
|---|---|---|
| EPS | 2400.00% | 120.66% |
| AEPS | 21.22% | 23.98% |
| CFPS | 32.55% | 24.61% |
| FCF | 25.79% | 27.11% |
Debt Ratios are problematic for Intangible and Goodwill Ratios and Liquidity Ratios. The Long Term Debt/Market Cap Ratio for 2024 is fine but a bit high at 0.70 and currently at 0.71. The Intangible and Goodwill Ratios for 2024 are far too high at 1.82 and currently at 1.85. The Liquidity Ratio for 2024 is far too low at 0.33 and 0.29 currently. If you added in Cash Flow after dividends, the ratios are still far too low at 0.35 and currently at 0.33. The Debt Ratio for 2024 is low for a financial at 1.04 and 1.04 currently. The Leverage reported for 2024 are fine for at 3.5 and currently at 3.5.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.71 | 0.70 |
| Intang/GW | 1.82 | 1.85 |
| Liquidity | 0.33 | 0.29 |
| Liq. + CF | 0.35 | 0.33 |
| Liq CF DB | 0.41 | 0.40 |
| Debt Ratio | 1.04 | 1.04 |
| Leverage Rep | 3.5 | 3.5 |
The Total Return per year is shown below for years of 5 to 30 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 2.13% | 10.30% | 7.34% | 2.96% |
| 2014 | 10 | -3.81% | 2.65% | -0.43% | 3.07% |
| 2009 | 15 | -8.01% | 6.16% | 2.30% | 3.86% |
| 2004 | 20 | 3.46% | 9.20% | 3.21% | 5.99% |
| 1999 | 25 | 14.87% | 15.88% | 7.70% | 8.18% |
| 1994 | 30 | 16.31% | 19.40% | 10.74% | 8.66% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 7.48, 11.26, 15.05. The corresponding 10 year ratios are 7.65, 11.88 and 15.40. The corresponding historical ratios are 14.80, 16.92 and 19.89. The current ratio is 23.57 based on a stock price of $31.58 and EPS estimate for 2025 of $1.34. The current ratio is above the 10 year median high ratio. This stock price testing suggests that the stock price is relatively expensive.
I also have Adjusted Earnings per Share (AEPS) data. The 5-year low, median, and high median Price/Adjusted Earnings per Share Ratios are 3.98, 6.37 and 8.76. The corresponding 10 year ratios are 5.96, 7.79 and 10.04. The corresponding historical ratios are 11.49, 12.70 and 15.00. The current ratio is 7.93 based on a stock price of $31.58 and AEPS estimate for 2025 of $3.98. The current ratio is between the median and high ratios of the 10 year median ratios. This stock price testing suggests that the stock price is relatively but above the median.
I get a Graham Price of $15.88. The 10-year low, median, and high median Price/Graham Price Ratios are 0.90, 1.17 and 1.41. The current P/GP Ratio is 1.99 based on a stock price of $31.58. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Book Value per Share Ratio of 3.29. The current P/B Ratio is 11.21 based on a Book Value of $403.7M, Book Value per share of $2.82 and a stock price of $31.58. The current P/B Ratio is 241% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get a 10-year median Price/Cash Flow per Share Ratio of 7.68. The current P/CF Ratio is 11.12 based on Cash Flow per Share estimate for 2025 of $2.84, Cash Flow of $407M and a stock price of $31.58. The current ratio is 45% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.
I get an historical median dividend yield of 3.65%. The current dividend yield is 2.53% based on dividends $0.80 and a stock price of $31.58. The current dividend yield is 31% below the historical median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
I get a 10 year median dividend yield of 3.94%. The current dividend yield is 2.53% based on dividends $0.80 and a stock price of $31.58. The current dividend yield is 36% below the 10 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.
The 10-year median Price/Sales (Revenue) Ratio is 1.96. The current P/S Ratio is 1.41 based on Revenue estimate for 2025 of $3,210M, Revenue per Share of $22.40 and a stock price of $31.58. The current ratio is 28% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively cheap.
Results of stock price testing is that the stock price is probably overpriced, but there is a takeover in play. The dividend yield testing is saying that the stock price is expensive. A problem, of course, with this testing is recent dividend cuts. But dividend cuts are very much a negative. The P/S Ratio testing says that the stock price is cheap, but you not only need Revenue, you need also to be able to make a profit. A number of other tests are showing that the stock price is relatively expensive. A good test is the P/GP Ratio test.
When I look at analysts’ recommendations, I find Hold (3), Underperform (1), and Sell (1). The consensus is Underperform. The 12 months stock price target is $31.90 with a high $32.00 and low of $31.50. The 12 month stock price target price of $31.90 implies a total return of 3.55% with 1.02% from capital gains and 2.53% from dividends based on a current stock price of $31.58.
There is one analyst on Stock Chase for 2025 saying he sold at $32 and this company was a past top pick for him. There are a number of entries for 2024 with very mixed comments from Do Not Buy to Top Pick. From comments by Amy Legate-Wolfe on Motley Fool it does not look like she knows it is being bought out? Jitendra Parashar on Motley Fool also does not seem to know this stock will be bought out? The buy-out was first reported in November 2024. The company put out a Press Release about its fourth quarter of 2024 results. The company put out a Press Release about its first quarter of 2025 results.
Simply Wall Street via Yahoo Finance thinks this company is undervalued. They also do not mention the fact that there is a buyout on offer.
CI Financial is a provider of asset- and wealth management products and services. Its web site is here CI Financial Corp.
The last stock I wrote about was about was Waste Connections Inc (TSX-WCN, NYSE-WCN) … learn more. The next stock I will write about will be Computer Modelling Group Ltd (TSX-CMG, OTC-CMDXF) … learn more on Friday, June 27, 2025 around 5 pm. Tomorrow on my other blog I will write about George Friedman…. learn more on Thursday, June 26, 2025 around 5 pm.
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