Different investors have different ways to evaluate and leverage bull market phases. Some prefer to get in as early as possible, and if they miss that point, they would rather wait for another bullish opportunity than leverage the partial one on the first stock. Others prefer to wait a while before getting on a bullish train to ensure it has adequate momentum before making a buying decision.
Both are valid strategies for bullish trends that last for months or even for one or a couple of years. However, for stocks that have been growing consistently for years, the big question is how long it might continue, and a decision should be made accordingly. One such stock is Intact Financial (TSX: IFC), which has increased almost consistently for about 15 years.
The company
Intact Financial is the largest Property and Casualty (P&C) insurer in the country, dominating roughly one-fifth of the entire national market (20%). It also has a decent international footprint and a solid presence in the U.K./Ireland, thanks to an acquisition: RSA, an insurance giant with a 300-year track record.
The company is a giant in its niche space and has millions of policyholders worldwide through its 10 subsidiaries. The company has a massive network of broker relationships nationwide as well as a strong relationship with its consumers, which shows strong business practices and customer-centricity despite its massive scale.
The financials are also pretty strong and augment the other fundamental strengths the company possesses.
Is the stock still a buy?
Intact Financial’s performance has been excellent, and the stock has risen by over 630% since 2009. It’s also a trusted Dividend Aristocrat that has grown its payouts for 18 consecutive years and offers dividends at a 1.95% yield.
It’s also quite resilient, especially considering one important phase in its performance history—the market crash of 2020. The stock fell hard, but it recovered to its pre-crash levels within a year.
This is relevant because the market is going through a correction phase right now. The TSX has dipped about 4.9% since the beginning of this month and is expected to continue downward for a while. At the same time, the Intact Financial stock rose by 1.6%. However, it might only be a temporary delay before the stock follows the market.
But even if it would be a good idea to remain cautious about this stock in the short term, it’s still a buy in the long term. Its strengths and record make it a compelling stock that you can hold for years, even decades.
Foolish takeaway
When it comes to stocks like Intact Financial, market crashes and corrections like the ones we are likely to experience in the coming weeks should be considered opportunities. It would allow investors to buy this robust growth stock at a discount and let them lock in a yield much more impressive than the one it’s offering right now.
