First American Corporation (The) (NYSE: FAF) is one of 88 public companies in the “Property & Casualty Insurance” industry, but how does it weigh in compared to its rivals? We will compare First American Corporation (The) to similar companies based on the strength of its earnings, dividends, analyst recommendations, profitability, institutional ownership, risk and valuation.

Institutional and Insider Ownership

83.8% of First American Corporation (The) shares are held by institutional investors. Comparatively, 59.7% of shares of all “Property & Casualty Insurance” companies are held by institutional investors. 3.1% of First American Corporation (The) shares are held by insiders. Comparatively, 15.6% of shares of all “Property & Casualty Insurance” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares First American Corporation (The) and its rivals gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
First American Corporation (The) $5.58 billion $342.99 million 21.44
First American Corporation (The) Competitors $11.51 billion $1.16 billion 140.47

First American Corporation (The)’s rivals have higher revenue and earnings than First American Corporation (The). First American Corporation (The) is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a summary of current ratings and price targets for First American Corporation (The) and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First American Corporation (The) 0 1 1 0 2.50
First American Corporation (The) Competitors 620 2241 2109 45 2.31

First American Corporation (The) currently has a consensus target price of $49.50, suggesting a potential downside of 8.76%. As a group, “Property & Casualty Insurance” companies have a potential upside of 6.07%. Given First American Corporation (The)’s rivals higher possible upside, analysts plainly believe First American Corporation (The) has less favorable growth aspects than its rivals.

Profitability

This table compares First American Corporation (The) and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First American Corporation (The) 4.88% 14.30% 4.95%
First American Corporation (The) Competitors 8.83% 3.41% 2.19%

Volatility & Risk

First American Corporation (The) has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, First American Corporation (The)’s rivals have a beta of 0.90, meaning that their average share price is 10% less volatile than the S&P 500.

Dividends

First American Corporation (The) pays an annual dividend of $1.52 per share and has a dividend yield of 2.8%. First American Corporation (The) pays out 60.1% of its earnings in the form of a dividend. As a group, “Property & Casualty Insurance” companies pay a dividend yield of 1.3% and pay out 13.3% of their earnings in the form of a dividend. First American Corporation (The) has raised its dividend for 5 consecutive years.

Summary

First American Corporation (The) rivals beat First American Corporation (The) on 9 of the 15 factors compared.

About First American Corporation (The)

First American Financial Corporation, through its subsidiaries, is engaged in the business of providing financial services. The Company operates through the title insurance and services segment, and specialty insurance segment. The title insurance and services segment provides title insurance, closing and/or escrow services and similar or related services domestically and internationally in connection with residential and commercial real estate transactions. The title insurance and services segment also provides products, services and solutions involving the use of property related data, including data derived from its database, which are designed to manage risk or otherwise facilitate real estate transactions. The specialty insurance segment issues property and casualty insurance policies and sells home warranty products to residential homeowners and renters for liability losses and typical hazards, such as fire, theft, vandalism and other types of property damage.

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