February 27, 2025
Top 10 Stock First American Financial Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: First American Financial – Top 10 Stock in Dow Jones U.S. Insurance Index
First American Financial is listed as a top 10 stock on February 27, 2025 in the market index D.J. US Insurance because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 49 (49% performer), Obermatt assesses an overall hold recommendation for First American Financial on February 27, 2025.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Property & Casualty Insurance |
| Index | Dividends USA, Employee Focus US, D.J. US Insurance, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View First American Financial Hold
| 360 METRICS | February 27, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 36 |
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| 360° VIEW | ||||||||
| 360° VIEW | 49 |
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ANALYSIS: With an Obermatt 360° View of 49 (better than 49% compared with alternatives), overall professional sentiment and financial characteristics for the stock First American Financial are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for First American Financial. The consolidated Value Rank has an attractive rank of 77, which means that the share price of First American Financial is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 77% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 67, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 36. Professional investors are more confident in 64% other stocks. Worryingly, the company has risky financing, with a Safety rank of 34. This means 66% of comparable companies have a safer financing structure than First American Financial. ...read more
RECOMMENDATION: With a consolidated 360° View of 49, First American Financial is worse than 51% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 77 and the Growth Rank above-average at 67, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 36. In addition, the company financing structure is on the riskier side (Safety Rank of 34). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for First American Financial only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 36 (better than 36% compared with alternatives), overall professional sentiment and engagement for the stock First American Financial is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for First American Financial. Analyst Opinions are at a rank of 65 (better than 65% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 11, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in First American Financial. The Professional Investors rank is also low at 48, meaning that professional investors hold less stock in this company than in 52% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 43, which means that the current professional news and professional social networks are critical of this company (more negative news than for 57% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 36 (less encouraging than 64% compared with investment alternatives), First American Financial has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: First American Financial Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 77 (better than 77% compared with alternatives) for 2022, First American Financial shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for First American Financial. Price-to-Sales (P/S) is 62 which means that the stock price compared with what market professionals expect for future sales is lower than for 62% of comparable companies, indicating a good value for First American Financial's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 69. Finally, compared with other companies in the same industry, dividend yields of First American Financial are expected to be higher than for 90% of all competitors (a Dividend Yield rank of 90). The only low rank is for expected profits with a Price-to-Profit Rank of 48, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 77, is a buy recommendation based on First American Financial's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: First American Financial Growth Momentum good
| GROWTH METRICS | February 27, 2025 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 74 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 72 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 41 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 53 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 67 |
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ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), First American Financial shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for First American Financial. Sales Growth has a rank of 74 which means that currently, professionals expect the company to grow more than 74% of its competitors. Both Profit Growth, with a rank of 72, and Stock Returns, with a rank of 53, are also above average. But Capital Growth only has a rank of 41, which means that, currently, professionals expect the company to grow its invested capital less than 59% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: First American Financial Debt Financing Safety below-average
| SAFETY METRICS | February 27, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 47 |
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| REFINANCING | ||||||||
| REFINANCING | 2 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 12 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company First American Financial has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of First American Financial is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for First American Financial. Liquidity is at 12, meaning that the company generates less profit to service its debt than 88% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 47, meaning the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. Finally, Refinancing is at a rank of 2 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), First American Financial has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: First American Financial Below-Average Financial Performance
| COMBINED PERFORMANCE | February 27, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 12 |
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| COMBINED | ||||||||
| COMBINED | 40 |
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ANALYSIS: With an Obermatt Combined Rank of 40 (worse than 60% compared with investment alternatives), First American Financial (Property & Casualty Insurance, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of First American Financial are a good value (attractively priced) with a consolidated Value Rank of 77 (better than 77% of alternatives), show above-average growth (Growth Rank of 67) but are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 40, is a hold recommendation based on First American Financial's financial characteristics. As the company First American Financial's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 77) and above-average growth (Obermatt Growth Rank of 67), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 34) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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