FIRST AMERICAN FINANCIAL (FAF) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:FAF - US31847R1023 - Common Stock
61.49 USD
+1.45 (+2.42%)
61.49 USD
0 (0%)
Overall FAF gets a fundamental rating of 4 out of 10. We evaluated FAF against 146 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
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.
FAF had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
FAF has a better Return On Assets (2.74%) than 62.16% of its industry peers.
Looking at the Return On Equity, with a value of 9.10%, FAF is in line with its industry, outperforming 42.57% of the companies in the same industry.
FAF's Return On Invested Capital of 4.23% is fine compared to the rest of the industry. FAF outperforms 70.27% 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 15.11%.
The 3 year average ROIC (2.91%) for FAF is below the current ROIC(4.23%), indicating increased profibility in the last year.
| 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 in line with its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so FAF 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 3.73. This is a good value and a sign of high solvency as FAF would need 3.73 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.73, FAF is in line with its industry, outperforming 43.92% of the companies in the same industry.
FAF has a Debt/Equity ratio of 0.49. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.49, FAF is not doing good in the industry: 67.57% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.73 | ||
| Altman-Z | N/A |
ROIC/WACC0.53
WACC8.06%
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.
Measured over the past years, FAF shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.20% on average per year.
Looking at the last year, FAF shows a very strong growth in Revenue. The Revenue has grown by 20.66%.
Measured over the past years, FAF shows a decrease in Revenue. The Revenue has been decreasing by -0.24% on average per year.
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
FAF is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.83% yearly.
The Revenue is expected to grow by 8.91% on average over the next years. This is quite good.
EPS Next Y26.19%
EPS Next 2Y18.22%
EPS Next 3Y14.03%
EPS Next 5Y13.83%
Revenue Next Year19.68%
Revenue Next 2Y13.44%
Revenue Next 3Y10.2%
Revenue Next 5Y8.91%
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
Based on the Price/Earnings ratio of 11.35, the valuation of FAF can be described as reasonable.
FAF's Price/Earnings ratio is in line with the industry average.
FAF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.19.
With a Price/Forward Earnings ratio of 9.98, the valuation of FAF can be described as very reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as FAF.
The average S&P500 Price/Forward Earnings ratio is at 23.92. FAF is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 9.98 |
4.2 Price Multiples
75.68% 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 | 8.9 | ||
| EV/EBITDA | 5.52 |
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.
A more expensive valuation may be justified as FAF's earnings are expected to grow with 14.03% in the coming years.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y18.22%
EPS Next 3Y14.03%
5. Dividend
5.1 Amount
FAF has a Yearly Dividend Yield of 3.66%.
Compared to an average industry Dividend Yield of 2.42, 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 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.66% |
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 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 2Y18.22%
EPS Next 3Y14.03%
61.49
+1.45 (+2.42%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners94.69%
Inst Owner Change-0.01%
Ins Owners0.84%
Ins Owner Change-0.92%
Market Cap6.27B
Revenue(TTM)7.09B
Net Income(TTM)482.30M
Analysts75.56
Price Target78.74 (28.05%)
Short Float %2.21%
Short Ratio3.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.66% |
Yearly Dividend2.14
Dividend Growth(5Y)4.86%
DP46.13%
Div Incr Years14
Div Non Decr Years14
Ex-DateN/A
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)0.52%
PT rev (3m)0.26%
EPS NQ rev (1m)-0.56%
EPS NQ rev (3m)4.34%
EPS NY rev (1m)-0.77%
EPS NY rev (3m)5.56%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)-2.67%
Revenue NY rev (1m)-0.79%
Revenue NY rev (3m)1.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.35 | ||
| Fwd PE | 9.98 | ||
| P/S | 0.88 | ||
| P/FCF | 8.9 | ||
| P/OCF | 6.92 | ||
| P/B | 1.18 | ||
| P/tB | 1.86 | ||
| EV/EBITDA | 5.52 |
EPS(TTM)5.42
EY8.81%
EPS(NY)6.16
Fwd EY10.02%
FCF(TTM)6.91
FCFY11.24%
OCF(TTM)8.89
OCFY14.46%
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
WACC8.06%
ROIC/WACC0.53
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 Y26.19%
EPS Next 2Y18.22%
EPS Next 3Y14.03%
EPS Next 5Y13.83%
Revenue 1Y (TTM)20.66%
Revenue growth 3Y-12.33%
Revenue growth 5Y-0.24%
Sales Q2Q%40.56%
Revenue Next Year19.68%
Revenue Next 2Y13.44%
Revenue Next 3Y10.2%
Revenue Next 5Y8.91%
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.
What is the valuation status of FIRST AMERICAN FINANCIAL (FAF) stock?
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.
Can you provide the expected EPS growth for FAF stock?
The Earnings per Share (EPS) of FIRST AMERICAN FINANCIAL (FAF) is expected to grow by 26.19% in the next year.
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%.