Investing in beaten-down dividend stocks with strong fundamentals allows you to benefit from a tasty yield as well as capital gains when market sentiment recovers.
In this article, I have identified one such blue-chip TSX stock, Intact Financial (TSX: IFC), that should be on your watchlist right now. Down almost 17% from all-time highs, the TSX dividend stock offers you a yield of 2% in September 2025.
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Is this TSX stock a good buy right now?
Valued at a market cap of $47 billion, Intact Financial provides property and casualty insurance products to individuals and businesses across Canada, the United States, the United Kingdom, and internationally.
The company offers personal auto and property insurance, as well as commercial and specialty lines, pet insurance, and risk management solutions through multiple distribution channels, including brokers, direct-to-consumer platforms, and managing general agents.
Earlier this year, Intact Financial outlined an ambitious growth strategy at its investor day. The financial services giant aims to increase operating income per share by 10% annually through 2030, while maintaining its track record of outperforming the ROE (return on equity) across all operating geographies.
The Canadian property and casualty insurance leader demonstrated strong fundamentals, with 650 basis points of ROE outperformance over the past decade, and consistently achieved mid-teens returns across Canada, the United States, and the United Kingdom.
Management emphasized that recurring revenue from investment and distribution income now contributes nearly 10 points of ROE before underwriting operations begin.
Intact’s growth framework centres on three pillars:
- Organic growth targeting 6% annually
- Margin expansion of approximately 2% through advanced AI and data analytics deployment
- Capital deployment contributing over 4% through strategic acquisitions
Intact has deployed over 500 AI models across operations, generating $150 million in recurring annual benefits, with plans to exceed $500 million within five years.
International expansion remains a key driver, with the U.K. commercial lines market representing 2.7 times the size of Canada’s market, where Intact holds only 6% share compared to 25% domestically. Global Specialty Lines aims to achieve $10 billion in premium by 2030, targeting a combined ratio of under 90%, leveraging the company’s presence across 70% of the worldwide specialty markets.
Management highlighted over $20 billion in capital generation capacity through 2030, with north of $10 billion available for mergers and acquisitions at target leverage ratios.
The strategy builds on Intact’s proven integration capabilities. For instance, it has generated approximately 20% internal rates of return on previous acquisitions while successfully exporting Canadian operational expertise to international markets.
In the second quarter (Q2) of 2025, Intact Financial reported a net operating income per share of $5.23. Its book value per share rose 12% year over year, supported by an operating return on equity exceeding 16% for the third consecutive quarter. Revenue growth of 4% reflected momentum in personal lines, driven by rate increases and a 2% increase in policy count.
However, commercial lines faced ongoing pressure from elevated competition in large accounts, with premium growth of just 1% in Canada despite favourable market conditions.
The company’s combined ratio improved to 86.1%, indicating effective pricing and risk selection strategies, despite a $41 million increase in catastrophe losses compared to the prior year.
What is the price target for IFC stock?
Analysts covering Intact Financial forecast sales to increase from $21.66 billion in 2024 to $25.67 billion in 2027. Comparatively, adjusted earnings per share are forecast to expand from $14.67 to $18.65 in this period.
Today, the TSX stock is priced at 15.9 times forward earnings, which is marginally higher than its 10-year average. Therefore, at a similar multiple, it could gain 13% within the next 18 months, based on its earnings forecast.
A widening earnings base should enable Intact Financial to increase its annual dividend per share from $4.84 in 2024 to $6.27 in 2027, indicating an annual growth rate of 9%. If we adjust for dividends, the TSX stock has returned 250% to shareholders over the last 10 years.
