A Deeply Undervalued TSX Stock Down 14% Worth Holding Long Term

2026-05-28 09:30:00 ET

Some pullbacks deserve a shrug, while others deserve a second look. Intact Financial ( TSX:IFC ) falls into the second camp. The stock recently traded around $274, down about 14% from its 52-week high of $317.35.

That doesn’t make it a bargain-bin stock as it still trades at a premium to plenty of Canadian financial names. But this is one of those rare TSX companies where quality, consistency , and long-term earnings power can make a pullback look more interesting than alarming.

IFC

Intact stock is Canada’s largest property and casualty insurer. It sells auto, home, business, and specialty insurance across Canada, with operations in the United States, the United Kingdom, Ireland, and Europe. Insurance may not sound thrilling, but the business can compound nicely when management prices risk well.

That’s important when markets still look jumpy. Investors continue to worry about rates, household pressure, climate disasters, and slowing growth. Intact stock doesn’t avoid those risks. In fact, it sits right in the middle of them. Severe weather can drive claims higher, auto repair costs can squeeze margins, and a weaker economy can hurt commercial lines. Yet Intact has built a long record of managing through messy conditions better than many peers.

Into earnings

The latest quarter gives investors a reason to pay attention. In the first quarter of 2026, net operating income (NOI) per share rose 8% to $4.33, while diluted earnings per share (EPS) rose 12% to $4.12. The combined ratio came in at 91.3%; therefore, Intact stock earned an underwriting profit before investment income.

Those numbers don’t scream distress, but suggest the stock pulled back even while the business kept executing. That gap can create opportunity for long-term investors, especially after a strong run made the shares look priced for nearly perfect results.

The valuation helps the case. Intact recently traded around 14.4 times trailing earnings. That isn’t dirt cheap, but deeply undervalued doesn’t always mean the lowest multiple on the screen. Sometimes it means a great company trades at a price that doesn’t fully reflect its durability.

Looking ahead

The dividend adds another reason to hold. Intact stock won’t impress investors chasing huge yields. Its yield looks modest at 2.2%, though even that can bring in strong income from a $7,000 investment. Yet the payout comes from a business with strong earnings, a conservative balance sheet, and steady cash generation.

The growth story also looks stronger than many investors may assume. Intact stock can raise premiums when claims costs rise, expand into specialty insurance, and keep improving its technology. Its large scale gives it data, pricing power, and claims expertise that smaller rivals struggle to match.

Climate risk may increase losses, but it can also push weak competitors to retreat or misprice coverage. Intact stock has the size to adapt and the brand strength to keep customers through harder periods.

Bottom line

Altogether, Intact stock looks like the kind of stock worth holding long-term. It offers market leadership, strong underwriting, solid returns, and a business people need in good times and bad. A 14% drop doesn’t make it risk-free, yet it does make this quality stock worth another look before sentiment improves.

The post A Deeply Undervalued TSX Stock Down 14% Worth Holding Long Term appeared first on The Motley Fool Canada .

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Intact Financial. The Motley Fool has a disclosure policy .

2026