FIRST AMERICAN FINANCIAL (FAF)
US31847R1023 - Common Stock
Overall FAF gets a fundamental rating of 3 out of 10. We evaluated FAF against 140 industry peers in the Insurance industry. FAF has a bad profitability rating. Also its financial health evaluation is rather negative. FAF has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year FAF was profitable.
In the past year FAF had a positive cash flow from operations.
FAF had positive earnings in each of the past 5 years.
FAF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FAF's Return On Assets of 1.29% is in line compared to the rest of the industry. FAF outperforms 49.64% of its industry peers.
FAF has a worse Return On Equity (4.47%) than 62.59% of its industry peers.
FAF's Return On Invested Capital of 2.87% is fine compared to the rest of the industry. FAF outperforms 66.91% 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 4.09%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.29% | ||
| ROE | 4.47% | ||
| ROIC | 2.87% |
ROA(3y)3.53%
ROA(5y)4.44%
ROE(3y)10.54%
ROE(5y)12.36%
ROIC(3y)4.98%
ROIC(5y)5.75%
1.3 Margins
With a Profit Margin value of 3.52%, FAF is not doing good in the industry: 60.43% of the companies in the same industry are doing better.
FAF's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 9.13%, FAF is in line with its industry, outperforming 52.52% of the companies in the same industry.
In the last couple of years the Operating Margin of FAF has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 9.13% | ||
| PM (TTM) | 3.52% | ||
| GM | N/A |
OM growth 3Y-14.08%
OM growth 5Y-3.91%
PM growth 3Y-28.37%
PM growth 5Y-15.24%
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.
Compared to 1 year ago, FAF has about the same amount of shares outstanding.
FAF has less shares outstanding than it did 5 years ago.
FAF has a better debt/assets ratio than last year.
2.2 Solvency
FAF has a debt to FCF ratio of 21.42. This is a negative value and a sign of low solvency as FAF would need 21.42 years to pay back of all of its debts.
FAF has a Debt to FCF ratio of 21.42. This is in the lower half of the industry: FAF underperforms 72.66% of its industry peers.
A Debt/Equity ratio of 0.40 indicates that FAF is not too dependend on debt financing.
FAF has a Debt to Equity ratio (0.40) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 21.42 | ||
| Altman-Z | N/A |
ROIC/WACC0.35
WACC8.14%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The earnings per share for FAF have decreased strongly by -38.63% in the last year.
Measured over the past years, FAF shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.88% on average per year.
The Revenue for FAF has decreased by -22.42% in the past year. This is quite bad
The Revenue has been growing slightly by 0.87% on average over the past years.
EPS 1Y (TTM)-38.63%
EPS 3Y-12.14%
EPS 5Y-3.88%
EPS growth Q2Q-48.89%
Revenue 1Y (TTM)-22.42%
Revenue growth 3Y-5.38%
Revenue growth 5Y0.87%
Revenue growth Q2Q-16.66%
3.2 Future
FAF is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.69% yearly.
The Revenue is expected to grow by 6.55% on average over the next years.
EPS Next Y22.12%
EPS Next 2Y21.69%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year6.1%
Revenue Next 2Y6.55%
Revenue Next 3YN/A
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.
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
The Price/Earnings ratio is 14.73, which indicates a correct valuation of FAF.
FAF's Price/Earnings is on the same level as the industry average.
FAF's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 24.80.
The Price/Forward Earnings ratio is 12.06, which indicates a correct valuation of FAF.
FAF's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.27. FAF is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.73 | ||
| Fwd PE | 12.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FAF is valued a bit cheaper than 76.98% of the companies in the same industry.
FAF's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. FAF is more expensive than 71.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 62.65 | ||
| EV/EBITDA | 5.35 |
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 21.69% in the coming years.
PEG (NY)0.67
PEG (5Y)N/A
EPS Next 2Y21.69%
EPS Next 3YN/A
5. Dividend
5.1 Amount
FAF has a Yearly Dividend Yield of 3.73%.
FAF's Dividend Yield is a higher than the industry average which is at 4.31.
Compared to an average S&P500 Dividend Yield of 2.40, FAF pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
5.2 History
The dividend of FAF has a limited annual growth rate of 5.50%.
FAF has paid a dividend for at least 10 years, which is 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)5.5%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
FAF pays out 99.91% 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.
DP99.91%
EPS Next 2Y21.69%
EPS Next 3YN/A
FIRST AMERICAN FINANCIAL
NYSE:FAF (4/18/2024, 7:04:00 PM)
After market: 55.24 0 (0%)55.24
+0.25 (+0.45%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap5.70B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.73% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.73 | ||
| Fwd PE | 12.06 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.67
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.29% | ||
| ROE | 4.47% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 9.13% | ||
| PM (TTM) | 3.52% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-38.63%
EPS 3Y-12.14%
EPS 5Y
EPS growth Q2Q
EPS Next Y22.12%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-22.42%
Revenue growth 3Y-5.38%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y