First American Financial
Market Cap
US$7.3b
Last Updated
2021/07/30 01:27 UTC
Data Sources
Company Financials +
Executive Summary
First American Financial Corporation, through its subsidiaries, provides financial services. More Details
Rewards
Risk Analysis
Earnings are forecast to decline by an average of 20.6% per year for the next 3 years
Snowflake Analysis
Established dividend payer and good value.
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 is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: FAF's weekly volatility (3%) has been stable over the past year.
Market Performance
7 Day Return
2.5%
FAF
1.5%
US Insurance
0.8%
US Market
1 Year Return
28.7%
FAF
31.6%
US Insurance
37.5%
US Market
Return vs Industry: FAF matched the US Insurance industry which returned 28.4% over the past year.
Return vs Market: FAF underperformed the US Market which returned 36.5% over the past year.
Shareholder returns
| FAF | Industry | Market | |
|---|---|---|---|
| 7 Day | 2.5% | 1.5% | 0.8% |
| 30 Day | 6.2% | -0.03% | 1.0% |
| 90 Day | 3.6% | -2.1% | 3.8% |
| 1 Year | 33.1%28.7% | 34.9%31.6% | 39.7%37.5% |
| 3 Year | 29.7%18.0% | 35.2%25.1% | 64.4%54.1% |
| 5 Year | 91.6%63.6% | 78.1%56.1% | 124.9%100.0% |
Long-Term 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
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 ($66.85) is trading below our estimate of fair value ($152.97)
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 (7.5x) compared to the US Insurance industry average (10.6x).
PE vs Market: FAF is good value based on its PE Ratio (7.5x) compared to the US market (18.3x).
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 (1.4x) 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?
-20.6%
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 (-20.6% per year).
Earnings vs Market: FAF's earnings are forecast to decline over the next 3 years (-20.6% 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 (-7.7% per year).
High Growth Revenue: FAF's revenue is forecast to decline over the next 3 years (-7.7% 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 (11.3%).
Past Performance
How has First American Financial performed over the past 5 years?
20.9%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: FAF has high quality earnings.
Growing Profit Margin: FAF's current net profit margins (11.9%) are higher than last year (10%).
Past Earnings Growth Analysis
Earnings Trend: FAF's earnings have grown significantly by 20.9% per year over the past 5 years.
Accelerating Growth: FAF's earnings growth over the past year (54.8%) exceeds its 5-year average (20.9% per year).
Earnings vs Industry: FAF earnings growth over the past year (54.8%) underperformed the Insurance industry 62.1%.
Return on Equity
High ROE: FAF's Return on Equity (19%) is considered low.
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 (29%) is considered satisfactory.
Reducing Debt: FAF's debt to equity ratio has increased from 19.7% to 29% over the past 5 years.
Debt Coverage: FAF's debt is well covered by operating cash flow (78%).
Interest Coverage: FAF's interest payments on its debt are well covered by EBIT (22.4x coverage).
Balance Sheet
Dividend
What is First American Financial current dividend yield, its reliability and sustainability?
2.75%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FAF's dividend (2.75%) is higher than the bottom 25% of dividend payers in the US market (1.31%).
High Dividend: FAF's dividend (2.75%) is low compared to the top 25% of dividend payers in the US market (3.52%).
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 (20.4%), 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 (32.5% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
6.7yrs
Average management tenure
CEO
Dennis Gilmore (63 yo)
11.08yrs
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 ($USD6.47M).
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 (6.7 years average tenure).
Board Members
Experienced Board: FAF's board of directors are considered experienced (8.3 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.
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$7.348b
- Shares outstanding: 109.92m
- 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
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 Serv...
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2021/07/30 01:27 |
| End of Day Share Price | 2021/07/29 00:00 |
| Earnings | 2021/06/30 |
| Annual Earnings | 2020/12/31 |
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.