FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis
USA - NYSE:FAF - US31847R1023 - Common Stock
61.67 USD
+0.29 (+0.47%)
61.67 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to FAF. FAF was compared to 147 industry peers in the Insurance industry. FAF may be in some trouble as it scores bad on both profitability and health. FAF has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
FAF had positive earnings in the past year.
In the past year FAF had a positive cash flow from operations.
FAF had positive earnings in each of the past 5 years.
Each year in the past 5 years FAF had a positive operating cash flow.
1.2 Ratios
The Return On Assets of FAF (1.16%) is comparable to the rest of the industry.
The Return On Equity of FAF (3.68%) is worse than 79.59% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.15%, FAF is in line with its industry, outperforming 47.62% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for FAF is in line with the industry average of 4.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.16% | ||
| ROE | 3.68% | ||
| ROIC | 2.15% |
ROA(3y)1.31%
ROA(5y)3.38%
ROE(3y)4.26%
ROE(5y)9.7%
ROIC(3y)2.91%
ROIC(5y)4.71%
1.3 Margins
Looking at the Profit Margin, with a value of 2.90%, FAF is doing worse than 74.83% of the companies in the same industry.
FAF's Profit Margin has declined in the last couple of years.
FAF has a worse Operating Margin (6.27%) than 70.75% of its industry peers.
FAF's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.27% | ||
| PM (TTM) | 2.9% | ||
| GM | N/A |
OM growth 3Y-31.37%
OM growth 5Y-18.17%
PM growth 3Y-46.08%
PM growth 5Y-28.45%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
FAF has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
FAF has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for FAF has been reduced compared to 5 years ago.
FAF has a worse debt/assets ratio than last year.
2.2 Solvency
FAF has a debt to FCF ratio of 3.65. This is a good value and a sign of high solvency as FAF would need 3.65 years to pay back of all of its debts.
FAF's Debt to FCF ratio of 3.65 is in line compared to the rest of the industry. FAF outperforms 46.26% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that FAF is not too dependend on debt financing.
The Debt to Equity ratio of FAF (0.47) is worse than 63.27% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 3.65 | ||
| Altman-Z | N/A |
ROIC/WACC0.27
WACC7.99%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 44.53% over the past year.
FAF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.20% yearly.
FAF shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.66%.
FAF shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.24% yearly.
EPS 1Y (TTM)44.53%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%26.87%
Revenue 1Y (TTM)20.66%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%40.56%
3.2 Future
The Earnings Per Share is expected to grow by 15.83% on average over the next years. This is quite good.
The Revenue is expected to grow by 10.63% on average over the next years. This is quite good.
EPS Next Y19.61%
EPS Next 2Y17.91%
EPS Next 3Y15.83%
EPS Next 5YN/A
Revenue Next Year18.5%
Revenue Next 2Y13.49%
Revenue Next 3Y10.63%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 11.38, the valuation of FAF can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of FAF is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 26.19, FAF is valued rather cheaply.
A Price/Forward Earnings ratio of 10.06 indicates a reasonable valuation of FAF.
FAF's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.50, FAF is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.38 | ||
| Fwd PE | 10.06 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of FAF is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as FAF.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.42 | ||
| EV/EBITDA | 10.74 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as FAF's earnings are expected to grow with 15.83% in the coming years.
PEG (NY)0.58
PEG (5Y)N/A
EPS Next 2Y17.91%
EPS Next 3Y15.83%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.50%, FAF has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.28, FAF pays a bit more dividend than its industry peers.
FAF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.5% |
5.2 History
The dividend of FAF has a limited annual growth rate of 4.86%.
FAF has been paying a dividend for at least 10 years, so it has a reliable track record.
FAF has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)4.86%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
117.70% of the earnings are spent on dividend by FAF. This is not a sustainable payout ratio.
FAF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP117.7%
EPS Next 2Y17.91%
EPS Next 3Y15.83%
61.67
+0.29 (+0.47%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners92.41%
Inst Owner Change-0.12%
Ins Owners0.86%
Ins Owner Change0.43%
Market Cap6.28B
Revenue(TTM)7.09B
Net Income(TTM)188.70M
Analysts77.5
Price Target80.07 (29.84%)
Short Float %1.81%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.5% |
Yearly Dividend2.14
Dividend Growth(5Y)4.86%
DP117.7%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)16.61%
Min EPS beat(2)11.22%
Max EPS beat(2)22.01%
EPS beat(4)4
Avg EPS beat(4)17.92%
Min EPS beat(4)11.22%
Max EPS beat(4)22.01%
EPS beat(8)6
Avg EPS beat(8)5.89%
EPS beat(12)9
Avg EPS beat(12)4.53%
EPS beat(16)12
Avg EPS beat(16)6.93%
Revenue beat(2)2
Avg Revenue beat(2)3.13%
Min Revenue beat(2)2.41%
Max Revenue beat(2)3.85%
Revenue beat(4)3
Avg Revenue beat(4)1.1%
Min Revenue beat(4)-5.45%
Max Revenue beat(4)3.85%
Revenue beat(8)4
Avg Revenue beat(8)-0.14%
Revenue beat(12)5
Avg Revenue beat(12)-0.74%
Revenue beat(16)8
Avg Revenue beat(16)2.17%
PT rev (1m)0%
PT rev (3m)0.65%
EPS NQ rev (1m)-1.32%
EPS NQ rev (3m)5.87%
EPS NY rev (1m)0.05%
EPS NY rev (3m)3.66%
Revenue NQ rev (1m)-0.26%
Revenue NQ rev (3m)1.45%
Revenue NY rev (1m)0.21%
Revenue NY rev (3m)1.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.38 | ||
| Fwd PE | 10.06 | ||
| P/S | 0.96 | ||
| P/FCF | 9.42 | ||
| P/OCF | 7.21 | ||
| P/B | 1.22 | ||
| P/tB | 1.96 | ||
| EV/EBITDA | 10.74 |
EPS(TTM)5.42
EY8.79%
EPS(NY)6.13
Fwd EY9.94%
FCF(TTM)6.55
FCFY10.62%
OCF(TTM)8.55
OCFY13.87%
SpS64.01
BVpS50.36
TBVpS31.41
PEG (NY)0.58
PEG (5Y)N/A
Graham Number78.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.16% | ||
| ROE | 3.68% | ||
| ROCE | 2.71% | ||
| ROIC | 2.15% | ||
| ROICexc | 2.49% | ||
| ROICexgc | 3.24% | ||
| OM | 6.27% | ||
| PM (TTM) | 2.9% | ||
| GM | N/A | ||
| FCFM | 10.23% |
ROA(3y)1.31%
ROA(5y)3.38%
ROE(3y)4.26%
ROE(5y)9.7%
ROIC(3y)2.91%
ROIC(5y)4.71%
ROICexc(3y)3.38%
ROICexc(5y)5.29%
ROICexgc(3y)4.41%
ROICexgc(5y)6.78%
ROCE(3y)3.66%
ROCE(5y)5.93%
ROICexgc growth 3Y-35.82%
ROICexgc growth 5Y-22.59%
ROICexc growth 3Y-36.98%
ROICexc growth 5Y-22.98%
OM growth 3Y-31.37%
OM growth 5Y-18.17%
PM growth 3Y-46.08%
PM growth 5Y-28.45%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 3.65 | ||
| Debt/EBITDA | 3.93 | ||
| Cap/Depr | 96.82% | ||
| Cap/Sales | 3.13% | ||
| Interest Coverage | 2.83 | ||
| Cash Conversion | 140.61% | ||
| Profit Quality | 353.21% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score4
WACC7.99%
ROIC/WACC0.27
Cap/Depr(3y)133.56%
Cap/Depr(5y)115.83%
Cap/Sales(3y)3.74%
Cap/Sales(5y)2.92%
Profit Quality(3y)252.58%
Profit Quality(5y)196.49%
High Growth Momentum
Growth
EPS 1Y (TTM)44.53%
EPS 3Y-18.68%
EPS 5Y-5.2%
EPS Q2Q%26.87%
EPS Next Y19.61%
EPS Next 2Y17.91%
EPS Next 3Y15.83%
EPS Next 5YN/A
Revenue 1Y (TTM)20.66%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%40.56%
Revenue Next Year18.5%
Revenue Next 2Y13.49%
Revenue Next 3Y10.63%
Revenue Next 5YN/A
EBIT growth 1Y-26.69%
EBIT growth 3Y-39.83%
EBIT growth 5Y-18.36%
EBIT Next Year194.29%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y49.37%
FCF growth 3Y-13.76%
FCF growth 5Y-3.37%
OCF growth 1Y19.62%
OCF growth 3Y-9.73%
OCF growth 5Y-0.34%
FIRST AMERICAN FINANCIAL / FAF FAQ
What is the fundamental rating for FAF stock?
ChartMill assigns a fundamental rating of 4 / 10 to FAF.
Can you provide the valuation status for FIRST AMERICAN FINANCIAL?
ChartMill assigns a valuation rating of 5 / 10 to FIRST AMERICAN FINANCIAL (FAF). This can be considered as Fairly Valued.
Can you provide the profitability details for FIRST AMERICAN FINANCIAL?
FIRST AMERICAN FINANCIAL (FAF) has a profitability rating of 3 / 10.
What are the PE and PB ratios of FIRST AMERICAN FINANCIAL (FAF) stock?
The Price/Earnings (PE) ratio for FIRST AMERICAN FINANCIAL (FAF) is 11.38 and the Price/Book (PB) ratio is 1.22.
Can you provide the dividend sustainability for FAF stock?
The dividend rating of FIRST AMERICAN FINANCIAL (FAF) is 6 / 10 and the dividend payout ratio is 117.7%.