FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis
USA - NYSE:FAF - US31847R1023 - Common Stock
62.51 USD
+0.84 (+1.36%)
62.51 USD
0 (0%)
Taking everything into account, FAF scores 4 out of 10 in our fundamental rating. 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.
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
The Return On Assets of FAF (1.16%) is comparable to the rest of the industry.
FAF's Return On Equity of 3.68% is on the low side compared to the rest of the industry. FAF is outperformed by 79.59% of its industry peers.
FAF's Return On Invested Capital of 2.15% is in line compared to the rest of the industry. FAF outperforms 47.62% of its industry peers.
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
FAF has a worse Profit Margin (2.90%) than 74.83% of its industry peers.
FAF's Profit Margin has declined in the last couple of years.
FAF's Operating Margin of 6.27% is on the low side compared to the rest of the industry. FAF is outperformed by 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FAF is destroying value.
FAF has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, FAF has less shares outstanding
Compared to 1 year ago, FAF has a worse debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of FAF is 3.65, which is a good value as it means it would take FAF, 3.65 years of fcf income to pay off all of its debts.
FAF has a Debt to FCF ratio (3.65) which is in line with its industry peers.
FAF has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
FAF's Debt to Equity ratio of 0.47 is on the low side compared to the rest of the industry. FAF is outperformed by 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
FAF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 44.53%, which is quite impressive.
FAF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -5.20% yearly.
Looking at the last year, FAF shows a very strong growth in Revenue. The Revenue has grown by 20.66%.
The Revenue has been decreasing by -0.24% on average over the past years.
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.
Based on estimates for the next years, FAF will show a quite strong growth in Revenue. The Revenue will grow by 10.63% on average per year.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
FAF is valuated reasonably with a Price/Earnings ratio of 11.53.
The rest of the industry has a similar Price/Earnings ratio as FAF.
Compared to an average S&P500 Price/Earnings ratio of 26.19, FAF is valued rather cheaply.
The Price/Forward Earnings ratio is 10.20, which indicates a very decent valuation of FAF.
The rest of the industry has a similar Price/Forward Earnings ratio as FAF.
FAF's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.50.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.53 | ||
| Fwd PE | 10.2 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as FAF.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of FAF is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.55 | ||
| EV/EBITDA | 10.79 |
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.
FAF's earnings are expected to grow with 15.83% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.59
PEG (5Y)N/A
EPS Next 2Y17.91%
EPS Next 3Y15.83%
5. Dividend
5.1 Amount
FAF has a Yearly Dividend Yield of 3.58%.
FAF's Dividend Yield is a higher than the industry average which is at 3.28.
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 | 3.58% |
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
FAF pays out 117.70% of its income as dividend. This is not a sustainable payout ratio.
The dividend of FAF is growing, but earnings are growing more, so the dividend growth is sustainable.
DP117.7%
EPS Next 2Y17.91%
EPS Next 3Y15.83%
62.51
+0.84 (+1.36%)
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 Cap6.36B
Revenue(TTM)7.09B
Net Income(TTM)188.70M
Analysts77.5
Price Target80.07 (28.09%)
Short Float %1.81%
Short Ratio2.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.58% |
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 | 11.53 | ||
| Fwd PE | 10.2 | ||
| P/S | 0.98 | ||
| P/FCF | 9.55 | ||
| P/OCF | 7.31 | ||
| P/B | 1.24 | ||
| P/tB | 1.99 | ||
| EV/EBITDA | 10.79 |
EPS(TTM)5.42
EY8.67%
EPS(NY)6.13
Fwd EY9.81%
FCF(TTM)6.55
FCFY10.47%
OCF(TTM)8.55
OCFY13.68%
SpS64.01
BVpS50.36
TBVpS31.41
PEG (NY)0.59
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 11.53 and the Price/Book (PB) ratio is 1.24.
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%.