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

1.1%

TSX:FFH

1.8%

CA Insurance

1.0%

CA Market


1 Year Return

-17.7%

TSX:FFH

-6.2%

CA Insurance

-5.0%

CA Market

FFH underperformed the Insurance industry which returned -6.5% over the past year.

FFH underperformed the Market in Canada which returned -4.1% over the past year.


Share holder returns

FFHIndustryMarket
7 Day1.1%1.8%1.0%
30 Day-4.9%-4.9%-2.8%
90 Day-3.4%-4.0%-1.7%
1 Year-16.0%-17.7%-2.1%-6.2%-1.7%-5.0%
3 Year-13.3%-18.4%21.8%8.8%14.7%4.4%
5 Year30.6%18.0%25.6%4.7%12.5%-3.3%

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

Fairfax Financial Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).

Fairfax Financial Holdings's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Fairfax Financial Holdings is overvalued based on earnings compared to the CA Insurance industry average.

Fairfax Financial Holdings is good value based on earnings compared to the Canada market.


Price Based on Expected Growth

Fairfax Financial Holdings earnings are not expected to grow next year, we can't assess if its growth is good value.


Price Based on Value of Assets

Fairfax Financial Holdings is good value based on assets compared to the CA Insurance industry average.


Next Steps

Future Growth

How is Fairfax Financial Holdings expected to perform in the next 1 to 3 years based on estimates from 7 analysts?

-2.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Fairfax Financial Holdings's revenue is expected to grow by 1.3% yearly, however this is not considered high growth (20% yearly).

Fairfax Financial Holdings's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.

Fairfax Financial Holdings's revenue growth is positive but not above the Canada market average.

Fairfax Financial Holdings's earnings are expected to decrease over the next 1-3 years, this is below the Canada market average.

Fairfax Financial Holdings's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 1.9%.


Earnings per Share Growth Estimates


Future Return on Equity

Fairfax Financial Holdings is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


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

Fairfax Financial Holdings's year on year earnings growth rate has been positive over the past 5 years.

Fairfax Financial Holdings's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Fairfax Financial Holdings's 1-year earnings growth is negative, it can't be compared to the CA Insurance industry average.


Return on Equity

Fairfax Financial Holdings has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Fairfax Financial Holdings used its assets more efficiently than the CA Insurance industry average last year based on Return on Assets.


Return on Capital Employed

Fairfax Financial Holdings's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Fairfax Financial Holdings's financial position?


Financial Position Analysis

Fairfax Financial Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Fairfax Financial Holdings's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Fairfax Financial Holdings's level of debt (45.4%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (32.8% vs 45.4% today).

Debt is not well covered by operating cash flow (3.8%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 4.5x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 3.2x debt.


Next Steps

Dividend

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

2.27%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Fairfax Financial Holdings's pays a higher dividend yield than the bottom 25% of dividend payers in Canada (1.99%).

Fairfax Financial Holdings's dividend is below the markets top 25% of dividend payers in Canada (5.97%).

Dividends per share have been stable in the past 10 years.

Dividends per share have increased over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (3.1x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (3.6x coverage).


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?

7.3yrs

Average management tenure


CEO

V. Watsa (69yo)

34.6yrs

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

V.'s remuneration is lower than average for companies of similar size in Canada.

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

7.3yrs

Average Tenure

62.5yo

Average Age

The average tenure for the Fairfax Financial Holdings management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

7.3yrs

Average Tenure

73yo

Average Age

The tenure for the Fairfax Financial Holdings board of directors is about average.


Insider Trading

More shares have been bought than sold by Fairfax Financial Holdings individual insiders in the past 3 months, but not in substantial volumes.


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: 0.0yrs
  • Jake Allen (49yo)

    Chief Financial Officer

    • Tenure: 0.0yrs
  • V. Watsa (69yo)

    Founder

    • Tenure: 34.6yrs
    • Compensation: US$1.32m
  • Eric Salsberg (74yo)

    VP of Corporate Affairs & Corporate Secretary

    • Tenure: 7.6yrs
    • Compensation: US$942.68k
  • Ronald Schokking (65yo)

    VP & Treasurer

    • Tenure: 13.5yrs
    • Compensation: US$877.90k
  • John Varnell (62yo)

    Vice President of Corporate Development

    • Tenure: 7.0yrs
    • Compensation: US$1.02m
  • Paul Rivett (51yo)

    President

    • Tenure: 6.1yrs
    • Compensation: US$4.11m
  • Peter Clarke (47yo)

    VP & COO

    • Tenure: 0.5yrs
    • Compensation: US$1.48m
  • Vinodh Loganadhan

    Vice President of Administrative Services

    • Tenure: 0.0yrs
  • Derek Bulas

    Associate Vice President of Legal

    • Tenure: 0.0yrs

Board Members

  • Tony Griffiths (88yo)

    Lead Director

    • Tenure: 0.0yrs
    • Compensation: US$168.05k
  • V. Watsa (69yo)

    Founder

    • Tenure: 34.6yrs
    • Compensation: US$1.32m
  • Brandon Sweitzer (77yo)

    Director

    • Tenure: 15.6yrs
    • Compensation: US$168.75k
  • Tim Price (76yo)

    Director

    • Tenure: 9.3yrs
    • Compensation: US$91.20k
  • John Ralph Palmer (75yo)

    Director

    • Tenure: 7.3yrs
    • Compensation: US$90.50k
  • Bob Gunn (73yo)

    Director

    • Tenure: 12.3yrs
    • Compensation: US$185.80k
  • Bill McFarland

    Director

    • Tenure: 0.1yrs
  • Lauren Templeton (42yo)

    Director

    • Tenure: 2.3yrs
    • Compensation: US$91.47k
  • Benjamin Watsa (40yo)

    Director

    • Tenure: 4.3yrs
    • Compensation: US$84.69k
  • Karen Jurjevich (63yo)

    Director

    • Tenure: 2.3yrs
    • 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$15.771b
  • Shares outstanding: 26.88m
  • 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 Analysis2019/08/22 23:35
End of Day Share Price2019/08/22 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.