Insurance Australia Group Limited (ASX: IAG) is certainly an intriguing stock, and one I am seriously considering adding to my own portfolio. To make for an even more appealing case, the shares have been on an upward trend since mid-March and could well climb much, much higher.
They are currently priced at $5.78, which is still 7.5% below their October high of $6.25 a share. Aside from being nice to be able to pick them up now at a discount, there are plenty of reasons to like the company for the long-term too. Here are three solid reasons you should be buying:
- Who could look past Insurance Australia Group's bumper dividend? At its current price, it yields 6.2% (fully franked, of course). In comparison, Commonwealth Bank of Australia (ASX: CBA) yields 4.7% while Telstra Corporation Ltd (ASX: TLS) yields 5.3%.
- Insurance Australia Group is also cheaper on a P/E ratio than a number of its competitors. Trading on a multiple of 11.1, AMP Limited (ASX: AMP) and Suncorp Group Limited (ASX: SUN) trade on multiples of 19.4 and 15.5 respectively.
- You should get in before interest rates rise. Insurers make a large portion of their earnings from investing the premiums collected from customers, so when interest rates rise, so will the company's earnings
Another incredible dividend I'm watching
While Insurance Australia Group's dividend is incredibly appealing, there's another (very promising) stock I'm keeping my eye firmly on.
