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Is it the Right Time to Buy Fidelity National (FNF) Stock?

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Fidelity National Financial Inc.’s (FNF - Free Report) leading market share in the residential purchase, refinance, and commercial markets, industry-leading margins, solid capital position along with favorable estimates revision make it a good investment choice.

The title insurer has a solid track of beating earnings estimates in the trailing 12 quarters.

Return on equity in the trailing 12 months was 25.2%, better than the industry average of 5.8%. This highlights the company’s efficiency in utilizing shareholders’ fund.

Zacks Rank & Price Performance

Fidelity National currently sports a Zacks Rank #1 (Strong Buy). In the past six months, the stock has gained 10.2%, compared with the industry’s increase of 9.7% and the Finance sector’s rise of 3%. The Zacks S&P 500 composite has lost 2.7% in the same time frame.

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Value Score

The stock carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a favorable Value Score, when combined with a solid Zacks, Rank are the best investment bets

Optimistic Growth Projections

The Zacks Consensus Estimate for 2023 earnings is pegged at $7.00, indicating an increase of 15.2% on 4% higher revenues of $13.7 billion.

FNF carries an impressive Growth Score of B.

Northbound Estimate Revision

The Zacks Consensus Estimate for 2022 has moved 3.1% north in the past 30 days, reflecting analyst optimism.

Business Tailwinds

Fidelity National has a leading market share in the residential purchase, refinance, and commercial markets. Thus, this nation’s largest title insurance and settlement services company remains well poised to benefit from the improving U.S. real estate market.

The acquisition of F&G Annuities & Life, a leading provider of annuity and life insurance concentrated in the middle-income market, provides Fidelity National a diversified growth strategy and a breather from the volatility integral to the core title insurance business.

This title insurer should continue to witness momentum in refinance volumes, strong purchase demand and rebound in commercial real estate activity. The market-leading position offers scale and competitive advantage by fueling revenues and lowering costs. FNF has been delivering industry-leading margins.

Fidelity National has a solid balance sheet that supports effective capital deployment including dividend, share buyback, mergers and acquisitions, organic growth initiative and debt payment.

FNF carries an impressive VGM Score of B.

Impressive Dividend History

Fidelity National has increased dividends for the last 11 years at a nine-year CAGR of 12.1%. The dividend yield is 3.4%, better than the industry average of 0.4%.

Other Stocks to Consider

Some other top-ranked insurers include United Fire Group (UFCS - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While United Fire and W.R. Berkley sport a Zacks Rank #1, Cincinnati Financial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, United Fire has declined 20.5%.

The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.

W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.53%. In the past year, WRB has rallied 23.2%.

The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.7% and 1.7% north, respectively, in the past 60 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.

The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 21%.

The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.

 

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