FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:FAF - US31847R1023 - Common Stock
63.94 USD
-0.45 (-0.7%)
63.94 USD
0 (0%)
FAF gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 147 industry peers in the Insurance industry. FAF has a medium profitability rating, but doesn't score so well on its financial health evaluation. FAF has a correct valuation and a medium growth rate. Finally FAF also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year FAF was profitable.
FAF had a positive operating cash flow in the past year.
In the past 5 years FAF has always been profitable.
Each year in the past 5 years FAF had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 2.74%, FAF perfoms like the industry average, outperforming 59.86% of the companies in the same industry.
Looking at the Return On Equity, with a value of 9.10%, FAF is in line with its industry, outperforming 40.82% of the companies in the same industry.
FAF has a Return On Invested Capital of 4.23%. This is in the better half of the industry: FAF outperforms 69.39% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for FAF is significantly below the industry average of 14.90%.
The last Return On Invested Capital (4.23%) for FAF is above the 3 year average (2.91%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.74% | ||
| ROE | 9.1% | ||
| ROIC | 4.23% |
ROA(3y)1.31%
ROA(5y)3.38%
ROE(3y)4.26%
ROE(5y)9.7%
ROIC(3y)2.91%
ROIC(5y)4.71%
1.3 Margins
FAF has a Profit Margin (6.80%) which is comparable to the rest of the industry.
FAF's Profit Margin has declined in the last couple of years.
FAF has a Operating Margin (12.28%) which is in line with its industry peers.
In the last couple of years the Operating Margin of FAF has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.28% | ||
| PM (TTM) | 6.8% | ||
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FAF is destroying value.
The number of shares outstanding for FAF remains at a similar level compared to 1 year ago.
FAF has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, FAF has a worse debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of FAF is 3.73, which is a good value as it means it would take FAF, 3.73 years of fcf income to pay off all of its debts.
FAF's Debt to FCF ratio of 3.73 is in line compared to the rest of the industry. FAF outperforms 43.54% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that FAF is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.49, FAF is doing worse than 68.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.73 | ||
| Altman-Z | N/A |
ROIC/WACC0.52
WACC8.09%
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.
The Earnings Per Share has been decreasing by -5.20% on average over the past years.
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 15.94% on average over the next years. This is quite good.
FAF is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.81% yearly.
EPS Next Y27.17%
EPS Next 2Y19.21%
EPS Next 3Y15.94%
EPS Next 5YN/A
Revenue Next Year20.63%
Revenue Next 2Y13.84%
Revenue Next 3Y10.81%
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
A Price/Earnings ratio of 11.80 indicates a reasonable valuation of FAF.
FAF's Price/Earnings ratio is in line with the industry average.
FAF is valuated cheaply when we compare the Price/Earnings ratio to 26.54, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 10.20, which indicates a very decent valuation of FAF.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FAF is on the same level as its industry peers.
FAF is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.78, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.8 | ||
| Fwd PE | 10.2 |
4.2 Price Multiples
73.47% of the companies in the same industry are more expensive than FAF, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as FAF.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.25 | ||
| EV/EBITDA | 5.8 |
4.3 Compensation for Growth
FAF's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
FAF's earnings are expected to grow with 15.94% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y19.21%
EPS Next 3Y15.94%
5. Dividend
5.1 Amount
FAF has a Yearly Dividend Yield of 3.40%.
FAF's Dividend Yield is a higher than the industry average which is at 3.42.
Compared to an average S&P500 Dividend Yield of 2.27, FAF pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
5.2 History
The dividend of FAF has a limited annual growth rate of 4.86%.
FAF has paid a dividend for at least 10 years, which is a reliable track record.
FAF has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)4.86%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
FAF pays out 46.13% of its income as dividend. This is a bit on the high side, but may be sustainable.
FAF's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP46.13%
EPS Next 2Y19.21%
EPS Next 3Y15.94%
63.94
-0.45 (-0.7%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners94.79%
Inst Owner Change-1.33%
Ins Owners0.86%
Ins Owner Change0.53%
Market Cap6.52B
Revenue(TTM)7.09B
Net Income(TTM)482.30M
Analysts75.56
Price Target78.34 (22.52%)
Short Float %2.17%
Short Ratio3.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.4% |
Yearly Dividend2.14
Dividend Growth(5Y)4.86%
DP46.13%
Div Incr Years14
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.55%
Min EPS beat(2)11.22%
Max EPS beat(2)15.88%
EPS beat(4)4
Avg EPS beat(4)17.75%
Min EPS beat(4)11.22%
Max EPS beat(4)22.01%
EPS beat(8)6
Avg EPS beat(8)7.43%
EPS beat(12)9
Avg EPS beat(12)5.4%
EPS beat(16)12
Avg EPS beat(16)7.01%
Revenue beat(2)2
Avg Revenue beat(2)4.47%
Min Revenue beat(2)3.85%
Max Revenue beat(2)5.09%
Revenue beat(4)4
Avg Revenue beat(4)3.73%
Min Revenue beat(4)2.41%
Max Revenue beat(4)5.09%
Revenue beat(8)4
Avg Revenue beat(8)0.33%
Revenue beat(12)6
Avg Revenue beat(12)0.08%
Revenue beat(16)8
Avg Revenue beat(16)1.59%
PT rev (1m)-2.17%
PT rev (3m)-0.26%
EPS NQ rev (1m)-3.03%
EPS NQ rev (3m)5.11%
EPS NY rev (1m)0%
EPS NY rev (3m)6.53%
Revenue NQ rev (1m)-4.1%
Revenue NQ rev (3m)-2.72%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.8 | ||
| Fwd PE | 10.2 | ||
| P/S | 0.92 | ||
| P/FCF | 9.25 | ||
| P/OCF | 7.19 | ||
| P/B | 1.23 | ||
| P/tB | 1.93 | ||
| EV/EBITDA | 5.8 |
EPS(TTM)5.42
EY8.48%
EPS(NY)6.27
Fwd EY9.8%
FCF(TTM)6.91
FCFY10.81%
OCF(TTM)8.89
OCFY13.91%
SpS69.55
BVpS52.02
TBVpS33.13
PEG (NY)0.43
PEG (5Y)N/A
Graham Number79.65
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.74% | ||
| ROE | 9.1% | ||
| ROCE | 5.34% | ||
| ROIC | 4.23% | ||
| ROICexc | 5.15% | ||
| ROICexgc | 6.67% | ||
| OM | 12.28% | ||
| PM (TTM) | 6.8% | ||
| GM | N/A | ||
| FCFM | 9.94% |
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-Score8
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.73 | ||
| Debt/EBITDA | 2.42 | ||
| Cap/Depr | 95.1% | ||
| Cap/Sales | 2.85% | ||
| Interest Coverage | 5.58 | ||
| Cash Conversion | 83.71% | ||
| Profit Quality | 146.01% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC8.09%
ROIC/WACC0.52
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 Y27.17%
EPS Next 2Y19.21%
EPS Next 3Y15.94%
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 Year20.63%
Revenue Next 2Y13.84%
Revenue Next 3Y10.81%
Revenue Next 5YN/A
EBIT growth 1Y213.21%
EBIT growth 3Y-39.83%
EBIT growth 5Y-18.36%
EBIT Next Year194.29%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y92.04%
FCF growth 3Y-13.76%
FCF growth 5Y-3.37%
OCF growth 1Y40.92%
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 6 / 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 4 / 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 11.8 and the Price/Book (PB) ratio is 1.23.
Can you provide the dividend sustainability for FAF stock?
The dividend rating of FIRST AMERICAN FINANCIAL (FAF) is 7 / 10 and the dividend payout ratio is 46.13%.