Yahoo Movies Why First American Financial Corporation (NYSE:FAF) Is An Attractive Investment To Consider
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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on First American Financial Corporation (NYSE:FAF) due to its excellent fundamentals in more than one area. FAF is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on First American Financial here.
Adequate balance sheet with proven track record
FAF has a strong track record of performance. In the previous year, FAF delivered an impressive double-digit return of 4.9% Unsurprisingly, FAF surpassed the industry return of 2.5%, which gives us more confidence of the company's capacity to drive earnings going forward. With a debt-to-equity ratio of 22%, FAF’s debt level is reasonable. This means that FAF’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt. FAF's has produced operating cash levels of 0.91x total debt over the past year, which implies that FAF's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
Next Steps:
For First American Financial, there are three essential factors you should further examine:
Future Outlook: What are well-informed industry analysts predicting for FAF’s future growth? Take a look at our free research report of analyst consensus for FAF’s outlook.
Valuation: What is FAF worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FAF is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FAF? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
