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FAF

First American FinancialNYSE:FAF Stock Report

Market Cap

US$8.1b

7D

0.9%

1Y

52.4%

Updated

24 Oct, 2021

Data

Company Financials +
FAF fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance6/6
Financial Health4/6
Dividends5/6

FAF Overview

First American Financial Corporation, through its subsidiaries, provides financial services.

First American Financial Competitors

Chubb

NYSE:CB

US$84.6b

Progressive

NYSE:PGR

US$55.9b

Travelers Companies

NYSE:TRV

US$39.9b

Allstate

NYSE:ALL

US$37.8b

Price History & Performance

Summary of all time highs, changes and price drops for First American Financial
Historical stock prices
Current Share PriceUS$73.80
52 Week HighUS$44.05
52 Week LowUS$76.00
Beta1.21
1 Month Change9.25%
3 Month Change13.29%
1 Year Change52.45%
3 Year Change68.88%
5 Year Change91.29%
Change since IPO390.37%

Recent News & Updates

Aug 31
First American Financial's (NYSE:FAF) Dividend Will Be Increased To US$0.51

First American Financial's (NYSE:FAF) Dividend Will Be Increased To US$0.51

First American Financial Corporation ( NYSE:FAF ) will increase its dividend on the 15th of September to US$0.51. This...

Aug 18
Here's Why I Think First American Financial (NYSE:FAF) Might Deserve Your Attention Today

Here's Why I Think First American Financial (NYSE:FAF) Might Deserve Your Attention Today

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Jul 27
Party Time: Brokers Just Made Major Increases To Their First American Financial Corporation (NYSE:FAF) Earnings Forecasts

Party Time: Brokers Just Made Major Increases To Their First American Financial Corporation (NYSE:FAF) Earnings Forecasts

First American Financial Corporation ( NYSE:FAF ) shareholders will have a reason to smile today, with the analysts...

Shareholder Returns

FAFUS InsuranceUS Market
7D0.9%2.7%1.7%
1Y52.4%40.9%30.3%

Return vs Industry: FAF exceeded the US Insurance industry which returned 40.9% over the past year.

Return vs Market: FAF exceeded the US Market which returned 30.3% over the past year.

Price Volatility

Is FAF's price volatile compared to industry and market?
FAF volatility
FAF Beta1.21
Industry Beta0.97
Market Beta1

Stable Share Price: FAF is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: FAF's weekly volatility (2%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
188919,597Dennis Gilmorehttps://www.firstam.com

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Specialty Insurance segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services.

First American Financial Fundamentals Summary

How do First American Financial's earnings and revenue compare to its market cap?
FAF fundamental statistics
Market CapUS$8.10b
Earnings (TTM)US$1.26b
Revenue (TTM)US$9.00b

6.4x

P/E Ratio

0.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
FAF income statement (TTM)
RevenueUS$9.00b
Cost of RevenueUS$3.46b
Gross ProfitUS$5.54b
ExpensesUS$4.28b
EarningsUS$1.26b

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

Feb 10, 2022

Earnings per share (EPS)11.49
Gross Margin61.56%
Net Profit Margin14.02%
Debt/Equity Ratio36.0%

How did FAF perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

17%

Payout Ratio

Valuation

Is First American Financial undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FAF ($73.8) is trading below our estimate of fair value ($167.24)

Significantly Below Fair Value: FAF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: FAF is good value based on its PE Ratio (6.4x) compared to the US Insurance industry average (10.3x).

PE vs Market: FAF is good value based on its PE Ratio (6.4x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: FAF is overvalued based on its PB Ratio (1.5x) compared to the US Insurance industry average (1.2x).


Future Growth

How is First American Financial forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-30.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FAF's earnings are forecast to decline over the next 3 years (-30.9% per year).

Earnings vs Market: FAF's earnings are forecast to decline over the next 3 years (-30.9% per year).

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

Revenue vs Market: FAF's revenue is expected to decline over the next 3 years (-9.4% per year).

High Growth Revenue: FAF's revenue is forecast to decline over the next 3 years (-9.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FAF's Return on Equity is forecast to be low in 3 years time (11.2%).


Past Performance

How has First American Financial performed over the past 5 years?

23.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FAF has high quality earnings.

Growing Profit Margin: FAF's current net profit margins (14%) are higher than last year (9.6%).


Past Earnings Growth Analysis

Earnings Trend: FAF's earnings have grown significantly by 23.6% per year over the past 5 years.

Accelerating Growth: FAF's earnings growth over the past year (97.1%) exceeds its 5-year average (23.6% per year).

Earnings vs Industry: FAF earnings growth over the past year (97.1%) exceeded the Insurance industry 67.4%.


Return on Equity

High ROE: FAF's Return on Equity (24.1%) is considered high.


Financial Health

How is First American Financial's financial position?


Financial Position Analysis

Short Term Liabilities: FAF's short term assets ($3.4B) do not cover its short term liabilities ($8.3B).

Long Term Liabilities: FAF's short term assets ($3.4B) exceed its long term liabilities ($1.8B).


Debt to Equity History and Analysis

Debt Level: FAF's debt to equity ratio (36%) is considered satisfactory.

Reducing Debt: FAF's debt to equity ratio has increased from 24.4% to 36% over the past 5 years.

Debt Coverage: FAF's debt is well covered by operating cash flow (62.9%).

Interest Coverage: FAF's interest payments on its debt are well covered by EBIT (25.6x coverage).


Balance Sheet


Dividend

What is First American Financial current dividend yield, its reliability and sustainability?

2.76%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: FAF's dividend (2.76%) is higher than the bottom 25% of dividend payers in the US market (1.29%).

High Dividend: FAF's dividend (2.76%) is low compared to the top 25% of dividend payers in the US market (3.48%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.7%), FAF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: FAF's dividends in 3 years are forecast to be well covered by earnings (32.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.9yrs

Average management tenure


CEO

Dennis Gilmore (63 yo)

11.33yrs

Tenure

US$11,173,959

Compensation

Mr. Dennis Joseph Gilmore is Chief Executive Officer of First American Financial Corporation since 2010. Mr. Gilmore is Chief Executive Officer, President and Director of First American Title Insurance Com...


CEO Compensation Analysis

Compensation vs Market: Dennis's total compensation ($USD11.17M) is above average for companies of similar size in the US market ($USD6.33M).

Compensation vs Earnings: Dennis's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: FAF's management team is seasoned and experienced (6.9 years average tenure).


Board Members

Experienced Board: FAF's board of directors are considered experienced (8.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

First American Financial Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: First American Financial Corporation
  • Ticker: FAF
  • Exchange: NYSE
  • Founded: 1889
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$8.101b
  • Shares outstanding: 109.77m
  • Website: https://www.firstam.com

Number of Employees


Location

  • First American Financial Corporation
  • 1 First American Way
  • Santa Ana
  • California
  • 92707-5913
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/24 22:11
End of Day Share Price2021/10/22 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


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.