TSX:FFH

Stock Analysis Report

Fairfax Financial Holdings

Executive Summary

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internationally.

Snowflake

Fundamentals

Established dividend payer and good value.


Similar Companies

Share Price & News

How has Fairfax Financial Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.8%

FFH

1.1%

CA Insurance

-0.4%

CA Market


1 Year Return

-14.5%

FFH

10.8%

CA Insurance

0.9%

CA Market

Return vs Industry: FFH underperformed the Canadian Insurance industry which returned 10.8% over the past year.

Return vs Market: FFH underperformed the Canadian Market which returned 0.9% over the past year.


Share holder returns

FFHIndustryMarket
7 Day-1.8%1.1%-0.4%
30 Day-5.7%-0.5%-2.1%
90 Day-10.2%1.4%-1.5%
1 Year-12.7%-14.5%15.7%10.8%4.4%0.9%
3 Year-18.0%-22.9%24.6%11.1%15.7%5.4%
5 Year23.6%11.6%44.5%20.1%26.1%7.9%

Price Volatility Vs. Market

How volatile is Fairfax Financial Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fairfax Financial Holdings undervalued based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: FFH (CA$560.48) is trading below our estimate of fair value (CA$1369.98)

Significantly Undervalued: FFH is trading below fair value by more than 20%.


Price Based on Earnings

PE vs Industry: FFH is poor value based on its PE Ratio (13.7x) compared to the Insurance industry average (12.8x).

PE vs Market: FFH is good value based on its PE Ratio (13.7x) compared to the Canadian market (13.7x).


Price Based on Expected Growth

Low PEG Ratio: FFH's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price Based on Value of Assets

PB vs Industry: FFH is good value based on its PB Ratio (0.9x) compared to the CA Insurance industry average (1.1x).


Next Steps

Future Growth

How is Fairfax Financial Holdings expected to perform in the next 1 to 3 years based on estimates from 8 analysts?

-4.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: FFH's earnings are forecast to decline over the next 3 years (-4.2% per year).

Earnings vs Market: FFH's earnings are forecast to decline over the next 3 years (-4.2% per year).

High Growth Earnings: FFH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: FFH's revenue (0.3% per year) is forecast to grow slower than the Canadian market (5.7% per year).

High Growth Revenue: FFH's revenue (0.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: FFH's Return on Equity is forecast to be low in 3 years time (10.7%).


Next Steps

Past Performance

How has Fairfax Financial Holdings performed over the past 5 years?

4.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: FFH's earnings have grown by 4.9% per year over the past 5 years.

Accelerating Growth: FFH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FFH had negative earnings growth (-58.7%) over the past year, making it difficult to compare to the Insurance industry average (-0.8%).


Return on Equity

High ROE: FFH's Return on Equity (6.1%) is considered low.


Return on Assets

ROA vs Industry: FFH has a higher Return on Assets than the Insurance industry average last year.


Return on Capital Employed

ROCE Improving: FFH's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Fairfax Financial Holdings's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: FFH has a low level of unsold assets or inventory.

Debt Coverage by Assets: FFH's debt is covered by short term assets (assets are 3.243720x debt).


Financial Institutions Analysis

Asset Level: FFH's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if FFH has a sufficient allowance for bad loans.

Low Risk Liabilities: FFH reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if FFH has an acceptable proportion of non-loan assets held.

Low Risk Deposits: FFH has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if FFH has an appropriate level of bad loans.


Next Steps

Dividend

What is Fairfax Financial Holdings's current dividend yield, its reliability and sustainability?

2.33%

Expected Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%2.0%markettop25%6.0%industryaverage3.7%forecastin3Years2.3%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: FFH's dividend (2.35%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: FFH's dividend (2.35%) is low compared to the top 25% of dividend payers in the Canadian market (5.98%).

Stable Dividend: FFH's dividends per share have been stable in the past 10 years.

Growing Dividend: FFH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.1%), FFH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FFH's dividends in 3 years are forecast to be well covered by earnings (25.4% payout ratio).


Next Steps

Management

What is the CEO of Fairfax Financial Holdings's salary, the management and board of directors tenure and is there insider trading?

7.2yrs

Average management tenure


CEO

V. Watsa (69yo)

34.8yrs

Tenure

US$1,318,207

Compensation

Mr. V. Prem Watsa founded Fairfax Financial Holdings Limited in 1985 and has been its Chairman and Chief Executive Officer since 1985. Mr. Watsa serves as the President of 1109519 Ontario Limited, 810679 O ...


CEO Compensation Analysis

Compensation vs. Market: V.'s total compensation ($USD1.00M) is about average for companies of similar size in the Canadian market ($USD6.89M).

Compensation vs Earnings: V.'s compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

7.2yrs

Average Tenure

62.5yo

Average Age

Experienced Management: FFH's management team is seasoned and experienced (7.2 years average tenure).


Board Age and Tenure

7.5yrs

Average Tenure

73yo

Average Age

Experienced Board: FFH's board of directors are considered experienced (7.5 years average tenure).


Insider Trading

Insider Buying: FFH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$7,86615 Aug 19
Christine McLean
EntityIndividual
Shares13
Max PriceUS$605.08
SellUS$635,75012 Jun 19
The Bradstreet Family Foundation,Endowment Arm
EntityCompany
Shares1,000
Max PriceUS$637.00
BuyUS$7,74417 Apr 19
Christine McLean
EntityIndividual
Shares13
Max PriceUS$595.69
SellUS$2,030,69520 Mar 19
Andrew Barnard
EntityIndividual
Role
Unit President
President of Fairfax Insurance Group
Shares3,323
Max PriceUS$611.10
BuyUS$23,59521 Dec 18
Christine McLean
EntityIndividual
Shares35
Max PriceUS$771.25

Ownership Breakdown


Management Team

  • Andy Barnard (63yo)

    President of Fairfax Insurance Group

    • Tenure: 0yrs
  • Jake Allen (49yo)

    Chief Financial Officer

    • Tenure: 0.2yrs
  • V. Watsa (69yo)

    Founder

    • Tenure: 34.8yrs
    • Compensation: US$1.32m
  • Eric Salsberg (74yo)

    VP of Corporate Affairs & Corporate Secretary

    • Tenure: 7.8yrs
    • Compensation: US$942.68k
  • Ronald Schokking (65yo)

    VP & Treasurer

    • Tenure: 13.7yrs
    • Compensation: US$877.90k
  • John Varnell (62yo)

    Vice President of Corporate Development

    • Tenure: 7.2yrs
    • Compensation: US$1.02m
  • Paul Rivett (51yo)

    President

    • Tenure: 6.3yrs
    • Compensation: US$4.11m
  • Peter Clarke (47yo)

    VP & COO

    • Tenure: 0.7yrs
    • Compensation: US$1.48m
  • Vinodh Loganadhan

    Vice President of Administrative Services

    • Tenure: 0yrs
  • Derek Bulas

    Associate Vice President of Legal

    • Tenure: 0yrs

Board Members

  • Tony Griffiths (88yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$168.05k
  • V. Watsa (69yo)

    Founder

    • Tenure: 34.8yrs
    • Compensation: US$1.32m
  • Brandon Sweitzer (77yo)

    Director

    • Tenure: 15.8yrs
    • Compensation: US$168.75k
  • Tim Price (76yo)

    Director

    • Tenure: 9.5yrs
    • Compensation: US$91.20k
  • John Ralph Palmer (75yo)

    Director

    • Tenure: 7.5yrs
    • Compensation: US$90.50k
  • Bob Gunn (73yo)

    Director

    • Tenure: 12.5yrs
    • Compensation: US$185.80k
  • Bill McFarland

    Director

    • Tenure: 0.3yrs
  • Lauren Templeton (42yo)

    Director

    • Tenure: 2.5yrs
    • Compensation: US$91.47k
  • Benjamin Watsa (40yo)

    Director

    • Tenure: 4.5yrs
    • Compensation: US$84.69k
  • Karen Jurjevich (63yo)

    Director

    • Tenure: 2.5yrs
    • Compensation: US$85.00k

Company Information

Fairfax Financial Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fairfax Financial Holdings Limited
  • Ticker: FFH
  • Exchange: TSX
  • Founded: 1951
  • Industry: Multi-line Insurance
  • Sector: Insurance
  • Market Cap: CA$15.478b
  • Shares outstanding: 27.62m
  • Website: https://www.fairfax.ca

Number of Employees


Location

  • Fairfax Financial Holdings Limited
  • 95 Wellington Street West
  • Suite 800
  • Toronto
  • Ontario
  • M5J 2N7
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FRFH.FOTCPK (Pink Sheets LLC)YesSubordinate Voting SharesUSUSDJan 1975
FFHTSX (The Toronto Stock Exchange)YesSubordinate Voting SharesCACADJan 1975
FFH NBMV (Bolsa Mexicana de Valores)YesSubordinate Voting SharesMXMXNJan 1975
FFXDB (Deutsche Boerse AG)YesSubordinate Voting SharesDEEURJan 1975
FFH.PRCTSX (The Toronto Stock Exchange)PFD SHS CCACADOct 2009
FXFL.FOTCPK (Pink Sheets LLC)PFD SHS CUSUSDOct 2009
FFH.PRETSX (The Toronto Stock Exchange)PFD SHS SER ECACADFeb 2010
FRFG.FOTCPK (Pink Sheets LLC)PFD SHS SER EUSUSDFeb 2010
FFH.PRGTSX (The Toronto Stock Exchange)PFD SHS SER GCACADJul 2010
FFH.PRITSX (The Toronto Stock Exchange)CV PFD SHS SER ICACADOct 2010
FRFX.FOTCPK (Pink Sheets LLC)CV PFD SHS SER IUSUSDOct 2010
FFH.PRKTSX (The Toronto Stock Exchange)CUM 5Y RT PFD KCACADMar 2012
FRFF.FOTCPK (Pink Sheets LLC)CUM 5Y RT PFD KUSUSDMar 2012
FRFZ.FOTCPK (Pink Sheets LLC)PFD SHS SER DUSUSDJan 2015
FFH.PRDTSX (The Toronto Stock Exchange)PFD SHS SER DCACADJan 2015
FFH.PRMTSX (The Toronto Stock Exchange)PFD SHS 5 YR RTCACADMar 2015
FFH.PRFTSX (The Toronto Stock Exchange)PFD SHS SER FCACADApr 2015
FAXX.FOTCPK (Pink Sheets LLC)PFD SHS SER HUSUSDOct 2015
FFH.PRHTSX (The Toronto Stock Exchange)PFD SHS SER HCACADOct 2015
FFH.PRJTSX (The Toronto Stock Exchange)PFD SHS SER JCACADJan 2016

Biography

Fairfax Financial Holdings Limited, through its subsidiaries, provides property and casualty insurance and reinsurance, and investment management services in the United States, Canada, Asia, and internatio ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:09
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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