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Fairfax Financial Holdings Ltd FRFFF


Primary Symbol: T.FFH Alternate Symbol(s):  FRFGF | T.FFH.PR.F | FXFHF | FRFHF | T.FFH.PR.G | FXFLF | T.FFH.PR.H | T.FFH.PR.I | T.FFH.PR.J | FRFXF | T.FFH.PR.K | FRFZF | T.FFH.PR.M | T.FFH.PR.C | FAXRF | T.FFH.PR.D | FFHPF | FAXXF | T.FFH.PR.E

Fairfax Financial Holdings Limited is a Canada-based holding company. The Company, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and the associated investment management. The Company’s segments include Property and Casualty Insurance and Reinsurance, Life insurance and Run-off and Non-insurance companies. The Property and Casualty Insurance and Reinsurance segment includes North American Insurers, Global Insurers and Reinsurers and International Insurers and Reinsurers. The Life Insurance and Run-off segment include Eurolife and Run-off. The Non-insurance companies segment includes restaurants and retail, Fairfax India, Thomas Cook India and others. Eurolife underwrites traditional life insurance policies (endowments, deferred annuities, whole life and term life), group benefits, including retirement benefits, and accident and health insurance policies. The North American Insurers include Northbridge, Crum & Forster and Zenith National.


TSX:FFH - Post by User

Post by retiredcfon Apr 01, 2022 8:23am
325 Views
Post# 34566221

Globe & Mail

Globe & Mail

What are we looking for?

Sustainable dividends from Canadian life insurers set to gain with rising interest rates.

The screen

The Bank of Canada’s commitment to spurring interest rates higher this year may slow growth for several sectors, but the financial industry – in particular life insurers – isn’t one of them.

Insurers write policies, collect premiums from customers and then invest those premiums to meet future claims. They’re required to invest significant amounts of that money in fixed-income instruments, namely bonds. That means rising interest rates are a boon to their returns. They also position the shareholders of those insurers for dividend hikes.

From a list of Canadian life insurers, we identified leaders with steady growth prospects that will gain even more from rising interest rates. We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors:

  • One point for five years of continuous dividend payments – two points for more than five;
  • Two points if it has raised the payment in the past five years;
  • One point for management’s commitment to dividends;
  • One point for operating in noncyclical industries;
  • One point for limited exposure to foreign currency rates and freedom from political interference;
  • Two points for a strong balance sheet, including manageable debt and adequate cash;
  • Two points for a long-term record of positive earnings and cash flow to cover dividends;
  • One point if the company is an industry leader.

Companies with 10 to 12 points have the most secure dividends, or the highest sustainability. Those with seven to nine points have above average sustainability; average sustainability, four to six points; and below average sustainability, one to three points.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor, and The TSI Dividend Advisor. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Canadian life insurers set to gain with rising interest rates

 
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RANKING* COMPANY TICKER DIV. SUSTAIN. RATING POINTS DIV. YLD. (%) MKT. CAP. ($ MIL.) 1Y TTL. RTN. (%) 
1 Great-West Lifeco Inc. GWO-T Above Average 9 5.3 34,111.4 10.4
2 Manulife Financial Corp. MFC-T Above Average 9 4.9 51,799.3 -0.6
3 Sun Life Financial Inc. SLF-T Above Average 9 3.8 41,205.6 9.7
4 Fairfax Financial Holdings FFH-T Above Average 9 1.9 16,425.2 24.6
5 Power Corp. of Canada POW-T Above Average 8 5.1 26,863.7 17.0
6 iA Financial Corp. Inc. IAG-T Above Average 8 3.3 8,223.8 10.1
7 E-L Financial Corp. Ltd.  ELF-T Above Average 8 1.1 3,364.0 -5.7

 

Source: Dividend Advisor.

 

*Ranking is determined by TSI Dividend Sustainability Score. Where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements.

Our TSI Dividend Sustainability Rating System generated seven stocks. Sun Life Financial Inc. and Manulife Financial Corp., both headquartered in Toronto, are among Canada’s leading life insurers, with expanding interest in Asia. E-L Financial Corp. Ltd., also based in Toronto, provides a range of insurance products for individuals as well as groups.

Another Toronto-based leader, Fairfax Financial Holdings Ltd., mainly sells insurance and reinsurance, but also manages a large investment portfolio. Winnipeg-headquartered Great-West Lifeco Inc. is a top life insurer in Canada, with operations in the United States, Britain and Europe. Quebec City-based iA Financial Corp. Inc. offers life and health insurance for individuals as well as groups. Montreal-headquartered holding company Power Corp. of Canada has controlling stakes in both Great-West Lifeco and IGM Financial Inc. The latter is Canada’s largest independent mutual fund provider.

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