October 17, 2024
Top 10 Stock Lifeco Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Lifeco – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
Lifeco is listed as a top 10 stock on October 17, 2024 in the market index TSX Composite because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 88 (top 88% performer), Obermatt assesses an overall strong buy recommendation for Lifeco on October 17, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Life & Health Insurance |
| Index | Renewables Users, TSX Composite |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Lifeco Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| SENTIMENT | ||||||||
| SENTIMENT | 73 |
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| 360° VIEW | ||||||||
| 360° VIEW | 88 |
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ANALYSIS: With an Obermatt 360° View of 88 (better than 88% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Lifeco are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Lifeco. The consolidated Value Rank has an attractive rank of 67, which means that the share price of Lifeco is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 67% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 73, which means that professional investors are more optimistic about the stock than for 73% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 17, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 27, meaning the company has a riskier financing structure than 73 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 88, Lifeco is better positioned than 88% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 67) and positive market sentiment in the professional investor community (Sentiment Rank of 73), but growth expectations are below-average (Growth Rank of 17) and the financing structure is on the risky side(Safety Rank of 27). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Lifeco is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Lifeco positive
ANALYSIS: With an Obermatt Sentiment Rank of 73 (better than 73% compared with alternatives), overall professional sentiment and engagement for the stock Lifeco is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Lifeco. Analyst Opinions are at a rank of 19 (worse than 81% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 63, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Lifeco. Even better, the Professional Investors rank is 95, meaning that professional investors hold more stock in this company than in 95% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 74, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 74% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 73 (more positive than 73% compared with investment alternatives), Lifeco has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Lifeco Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), Lifeco shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Lifeco. Price-to-Profit (also referred to as price-earnings, P/E) is 72 which means that the stock price compared with what market professionals expect for future profits is lower than for 72% of comparable companies, indicating a good value concerning Lifeco's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 44, which means that the stock price is lower as regards to invested capital than for 44% of comparable investments. On the other hand, Price-to-Sales is less favorable than 58% of alternatives (only 42% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 3% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on Lifeco's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Lifeco Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), Lifeco shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Lifeco. While Profit Growth has a good rank of 50, as professionals currently expect the company to grow its profits more than 50% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 3, which means that currently professionals expect the company to grow less than 97% of its competitors, while Capital Growth has a rank of 43 and Stock Returns have been below market median, with a rank of 35 (65% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Lifeco Debt Financing Safety below-average
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 66 |
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| REFINANCING | ||||||||
| REFINANCING | 96 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 27 |
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ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company Lifeco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Lifeco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Lifeco. Leverage is at 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors. Refinancing is at a rank of 96, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 96% of its competitors. Finally, Liquidity is also good at a rank of 98, which means that the company generates more profit to service its debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 27 (worse than 73% compared with alternatives), Lifeco has a financing structure that is riskier than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Lifeco Above-Average Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 50 |
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ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Lifeco (Life & Health Insurance, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Lifeco are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 27), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 50, is a buy recommendation based on Lifeco's financial characteristics. As the company Lifeco's key financial metrics exhibit good value (Obermatt Value Rank of 67) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 27), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 67% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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