First American Financial
Market Cap
US$4.8b
Last Updated
2020/04/08 09:03 UTC
Data Sources
Company Financials +
Executive Summary
First American Financial Corporation, through its subsidiaries, provides financial services.
Rewards
Risk Analysis
Earnings are forecast to decline by an average of -13.3% per year for the next 3 years
Snowflake Analysis
Solid track record established dividend payer.
Similar Companies
Share Price & News
How has First American Financial's share price performed over time and what events caused price changes?
Latest Share Price and Events
Stable Share Price: FAF's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
3.1%
FAF
1.2%
US Insurance
2.4%
US Market
1 Year Return
-21.4%
FAF
-20.0%
US Insurance
-10.0%
US Market
Return vs Industry: FAF underperformed the US Insurance industry which returned -20% over the past year.
Return vs Market: FAF underperformed the US Market which returned -10% over the past year.
Shareholder returns
| FAF | Industry | Market | |
|---|---|---|---|
| 7 Day | 3.1% | 1.2% | 2.4% |
| 30 Day | -28.9% | -18.7% | -11.0% |
| 90 Day | -28.3% | -28.8% | -19.4% |
| 1 Year | -19.1%-21.4% | -18.0%-20.0% | -8.1%-10.0% |
| 3 Year | 20.2%9.8% | -6.2%-13.6% | 17.3%9.6% |
| 5 Year | 36.3%17.3% | 17.2%2.9% | 36.1%21.1% |
Price Volatility Vs. Market
How volatile is First American Financial's share price compared to the market and industry in the last 5 years?
Simply Wall St News
1 week ago | Simply Wall St
A Sliding Share Price Has Us Looking At First American Financial Corporation's (NYSE:FAF) P/E Ratio3 weeks ago | Simply Wall St
What Is First American Financial's (NYSE:FAF) P/E Ratio After Its Share Price Tanked?4 weeks ago | Simply Wall St
Have First American Financial Corporation (NYSE:FAF) Insiders Been Selling Their Stock?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 ($42.25) is trading below our estimate of fair value ($103.79)
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 (6.8x) compared to the Insurance industry average (8.5x).
PE vs Market: FAF is good value based on its PE Ratio (6.8x) compared to the US market (13x).
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 (1.1x) compared to the US Insurance industry average (0.8x).
Next Steps
Future Growth
How is First American Financial forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?
-13.3%
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 (-13.3% per year).
Earnings vs Market: FAF's earnings are forecast to decline over the next 3 years (-13.3% 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 (-0.01% per year).
High Growth Revenue: FAF's revenue is forecast to decline over the next 3 years (-0.01% 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 (11.6%).
Next Steps
Past Performance
How has First American Financial performed over the past 5 years?
19.3%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: FAF has high quality earnings.
Growing Profit Margin: FAF's current net profit margins (11.4%) are higher than last year (8.3%).
Past Earnings Growth Analysis
Earnings Trend: FAF's earnings have grown by 19.3% per year over the past 5 years.
Accelerating Growth: FAF's earnings growth over the past year (49.1%) exceeds its 5-year average (19.3% per year).
Earnings vs Industry: FAF earnings growth over the past year (49.1%) exceeded the Insurance industry 43.7%.
Return on Equity
High ROE: FAF's Return on Equity (16%) is considered low.
Next Steps
Financial Health
How is First American Financial's financial position?
Financial Position Analysis
Short Term Liabilities: FAF's short term assets ($2.2B) do not cover its short term liabilities ($4.8B).
Long Term Liabilities: FAF's short term assets ($2.2B) do not cover its long term liabilities ($2.3B).
Debt to Equity History and Analysis
Debt Level: FAF's debt to equity ratio (22.6%) is considered satisfactory.
Reducing Debt: FAF's debt to equity ratio has reduced from 22.8% to 22.6% over the past 5 years.
Debt Coverage: FAF's debt is well covered by operating cash flow (91.1%).
Interest Coverage: FAF's interest payments on its debt are well covered by EBIT (19.9x coverage).
Balance Sheet
Next Steps
Dividend
What is First American Financial's current dividend yield, its reliability and sustainability?
4.17%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FAF's dividend (4.17%) is higher than the bottom 25% of dividend payers in the US market (1.93%).
High Dividend: FAF's dividend (4.17%) is low compared to the top 25% of dividend payers in the US market (5.46%).
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 reasonably low payout ratio (26.9%), 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 (33.2% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
8.3yrs
Average management tenure
CEO
Dennis Gilmore (61yo)
9.83s
Tenure
US$10,367,225
Compensation
Mr. Dennis Joseph Gilmore is Chief Executive Officer of First American Financial Corporation (also known as Financial Services Group). Mr. Gilmore is Chief Executive Officer, President and Director of Firs ...
CEO Compensation Analysis
Compensation vs Market: Dennis's total compensation ($USD10.37M) is above average for companies of similar size in the US market ($USD5.63M).
Compensation vs Earnings: Dennis's compensation has increased by more than 20% in the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO & Director | 9.83yrs | US$10.37m | 0.33% $15.8m | |
| Executive VP & CFO | 7.08yrs | US$3.50m | 0.052% $2.5m | |
| VP & Chief Accounting Officer | 7.08yrs | US$795.68k | 0.010% $475.8k | |
| Executive Vice President | 9.83yrs | US$5.23m | 0.33% $15.8m | |
| Chief Operating Officer of First American Title Insurance Company | 8.33yrs | US$5.28m | 0.040% $1.9m | |
| Director of Investor Relations | 10.25yrs | no data | no data | |
| Senior Vice President of Human Resources | 12.25yrs | no data | no data | |
| Executive Vice President of Data and Mortgage Solutions | no data | no data | no data | |
| Chief Economist | 5.42yrs | no data | no data | |
| Senior Vice President of Enterprise Data Strategy | 5.42yrs | no data | no data |
8.3yrs
Average Tenure
52yo
Average Age
Experienced Management: FAF's management team is seasoned and experienced (8.3 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO & Director | 9.83yrs | US$10.37m | 0.33% $15.8m | |
| Independent Chairman of the Board | 9.83yrs | US$400.00k | 2.35% $112.2m | |
| Independent Director | 7.08yrs | US$242.00k | 0.028% $1.4m | |
| Independent Director | 9.08yrs | US$245.00k | 0.034% $1.6m | |
| Lead Independent Director | no data | US$282.00k | 0.054% $2.6m | |
| Independent Director | 9.08yrs | US$235.12k | 0.041% $1.9m | |
| Independent Director | 1.92yrs | US$228.00k | 0.0034% $161.8k | |
| Independent Director | 4.83yrs | US$241.12k | 0.015% $693.9k | |
| Independent Director | 2.92yrs | US$228.00k | 0.0051% $244.4k |
8.1yrs
Average Tenure
65yo
Average Age
Experienced Board: FAF's board of directors are considered experienced (8.1 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: FAF insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
First American Financial Corporation's company bio, 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$4.773b
- Shares outstanding: 112.96m
- 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
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| FAF | NYSE (New York Stock Exchange) | Yes | Common Shares | US | USD | May 2010 |
| Y1F | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | May 2010 |
Biography
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. This segment also provides closing and/or escrow services; products and services involving the use of real property related data to mitigate risk or facilitates real estate transactions; and appraisals and other valuation-related products and services, lien release and document custodial services, warehouse lending services, default-related products and services, and title evidence services, as well as banking, trust, and wealth management services. In addition, it accommodates tax-deferred exchanges of real estate; and maintains, manages, and provides access to title plant records and images. This segment offers its products through a network of direct operations and agents in 49 states and in the District of Columbia, as well as in Canada, the United Kingdom, Australia, South Korea, and internationally. The Specialty Insurance segment provides property and casualty insurance comprising coverage to residential homeowners and renters for liability losses and typical hazards, such as fire, theft, vandalism, and other types of property damage. It also offers residential service contracts that cover residential systems, such as heating and air conditioning systems, and appliances against failures that occur as the result of normal usage during the coverage period; and auto insurance products. This segment markets its property and casualty insurance products through direct distribution channels, including marketing through its existing closing-service activities, as well as through a network of independent brokers in 36 states. First American Financial Corporation was founded in 1889 and is headquartered in Santa Ana, California.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/04/08 09:03 |
| End of Day Share Price | 2020/04/07 00:00 |
| Earnings | 2019/12/31 |
| Annual Earnings | 2019/12/31 |
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.