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Why Should You Stay Invested in 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 and solid capital position make it worth retaining in one’s portfolio. This Zacks Rank #3 (Hold) title insurer has a stellar track of beating earnings estimates in the trailing 13 quarters.

Return on equity in the trailing 12 months was 24.6%, better than the industry average of 5.8%, reflecting efficiency in utilizing shareholders’ fund.

However, year to date, the stock has lost 27.6% compared with the industry’s decrease of 5.1%.
 

Zacks Investment Research
Image Source: Zacks Investment Research

Nonetheless, the Zacks Consensus Estimate for 2023 earnings is pegged at $6.22, indicating an increase of 2.5%. The company has a Growth Score of B. This style score analyzes the growth prospects of a company.

Business Tailwinds

Given the recovery in the U.S. real estate market, Fidelity National, having a leading market share in the residential purchase, refinance, and commercial markets, is poised to benefit.

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

The nation’s largest title insurance and settlement services company should continue to witness momentum in refinance volumes, strong purchase demand and a rebound in commercial real estate activity. The market-leading position offers scale and competitive advantage by fueling revenues and lowering costs. The company has been delivering industry-leading margins.

Fidelity National remains focused on technological development that drives growth and productivity.

Fidelity National has a solid balance sheet, cushioning dividend payout, share buyback, mergers and acquisitions, organic growth initiatives and debt payment. This title insurer has increased dividends for the last 11 years at a nine-year CAGR of 12.1%. The dividend yield is 4.7%, better than the industry average of 0.4%.

Fidelity National has an impressive VGM Score of B.

Stocks to Consider

Some better-ranked stocks from the property and casualty insurance industry are American Financial Group (AFG - Free Report) , Chubb Limited (CB - Free Report) and Everest Re Group (RE - Free Report) .

The Zacks Consensus Estimate for American Financial Group’s 2022 and 2023 earnings has moved 9.8% and 7% in the past 60 days. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Chubb’s 2022 and 2023 earnings indicates a year-over-year increase of 19% and 10.7%. It carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Everest Re Group’s 2022 and 2023 earnings implies a year-over-year increase of 18.3% and 17.6%. It carries a Zacks Rank #2.

Shares of AFG, CB and RE have gained 0.2%, 0.1% and 0.4% year to date.


 

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