Why Should Fidelity National (FNF) Stock be in Your Portfolio
Fidelity National Financial’s FNF shares have gained 19.9% in a year, outperforming the industry’s increase of 12.8%. The Finance sector and the Zacks S&P 500 composite have risen 10% and 20.6%, respectively, in the said time frame.
Its market-leading position, higher direct premiums, agency premiums, strong origination demand and effective capital deployment should continue to drive this Zacks Rank #2 (Buy) company. It has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum
FNF’s return on equity in the trailing 12 months was 16%, better than the industry average of 7.2%, reflecting efficiency in utilizing shareholders’ funds.
The Zacks Consensus Estimate for 2024 earnings per share is pegged at $4.96, having moved 1.2% north in the past 60 days. It has a Growth Score of B. Earnings of this insurer increased 16.5% in the last five years.
Can the Stock Retain the Momentum?
Fidelity National boasts a market-leading position in residential purchase, refinance and commercial markets that provides a scale advantage. It also has one of the largest and deepest real estate data networks. Its core title business is complemented by ancillary real estate-related businesses. Its scale and volume fuel revenues and lower costs provide a competitive advantage.
F&G Annuities & Life buyout, a leading provider of annuity and life insurance concentrated in the middle-income market, provides the title insurer with a diversified growth strategy and shields it from the volatility integral to the core title insurance business. Expanded distribution channels and attractive spreads should drive sales at F&G Annuities & Life.
Assets under management are expected to have benefited from solid retail annuity sales and F&G's interest in institutional markets. F&G invests in a high-quality and well-diversified portfolio and its average assets under management growth drives earnings.
Fidelity National continues to make investments in technology to widen its market-leading position.
FNF’s balanced capital allocation aids in strategic investments in title technology and other strategic initiatives to support innovation and organic growth in the business.
A solid capital position supports capital payout, mergers and acquisitions, organic growth initiatives and debt payments. Fidelity National has increased dividends at a 10-year CAGR of 12.4%. The dividend yield is 3.9%, better than the industry average of 0.3%.
Attractive Valuation
The company’s shares are trading at a forward price-to-earnings multiple of 10, lower than the industry average of 26. Before valuation expands, it is wise to take a position in the stock.
It has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the same space are CNA Financial Corporation CNA, Chubb Limited CB and Berkshire Hathaway (BRK.B), each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNA Financial delivered a trailing four-quarter average earnings surprise of 9.24%. The stock has lost 3.2% in a year.
The Zacks Consensus Estimate for CNA’s 2024 earnings indicates an increase of 8.8% from the 2023 estimated figure. The expected long-term earnings growth rate is 5%. The consensus estimate for 2024 earnings has moved up 1.5% in the past 30 days.
Chubb’s earnings surpassed estimates in three of the last four quarters while missing in one, the average being 6.51%. The stock has gained 0.3% in a year.
The Zacks Consensus Estimate for Chubb’s 2024 earnings implies a rise of 7.3% from the 2023 estimated figure. The expected long-term earnings growth rate is 10%. The consensus estimate for CB’s 2024 earnings has moved up 0.2% in the past seven days.
Berkshire delivered a trailing four-quarter average earnings surprise of 0.20%. In a year, the stock has gained 14.8%.
The Zacks Consensus Estimate for BRK.B’s 2024 earnings indicates an increase of 11.1% from the 2023 estimated figure. The expected long-term earnings growth rate is 7%. The consensus estimate for BRK.B’s 2024 earnings has moved up 0.9% in the past 30 days.
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Fidelity National Financial, Inc. (FNF) : Free Stock Analysis Report
