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FAIRFAX FINANCIAL HLDGS LTD (FFH-U.CA) Stock Fundamental Analysis

TSX:FFH-U - Toronto Stock Exchange - CA3039011026 - Common Stock - Currency: USD

1420.69  +2.64 (+0.19%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to FFH-U. FFH-U was compared to 85 industry peers in the Insurance industry. There are concerns on the financial health of FFH-U while its profitability can be described as average. FFH-U has a decent growth rate and is not valued too expensively.


Dividend Valuation Growth Profitability Health

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5

1. Profitability

1.1 Basic Checks

FFH-U had positive earnings in the past year.
Each year in the past 5 years FFH-U has been profitable.
The reported operating cash flow has been mixed in the past 5 years: FFH-U reported negative operating cash flow in multiple years.
FFH-U.CA Yearly Net Income VS EBIT VS OCF VS FCFFFH-U.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B -4B 6B

1.2 Ratios

With an excellent Return On Assets value of 4.15%, FFH-U belongs to the best of the industry, outperforming 84.88% of the companies in the same industry.
Looking at the Return On Equity, with a value of 16.80%, FFH-U belongs to the top of the industry, outperforming 84.88% of the companies in the same industry.
With an excellent Return On Invested Capital value of 5.62%, FFH-U belongs to the best of the industry, outperforming 83.72% of the companies in the same industry.
Industry RankSector Rank
ROA 4.15%
ROE 16.8%
ROIC 5.62%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
FFH-U.CA Yearly ROA, ROE, ROICFFH-U.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5 -5 10 15 20

1.3 Margins

FFH-U has a Profit Margin of 9.91%. This is comparable to the rest of the industry: FFH-U outperforms 54.65% of its industry peers.
FFH-U's Profit Margin has been stable in the last couple of years.
FFH-U has a Operating Margin (15.64%) which is in line with its industry peers.
In the last couple of years the Operating Margin of FFH-U has grown nicely.
Industry RankSector Rank
OM 15.64%
PM (TTM) 9.91%
GM N/A
OM growth 3Y20.29%
OM growth 5Y18.07%
PM growth 3Y-11.16%
PM growth 5Y0.37%
GM growth 3YN/A
GM growth 5YN/A
FFH-U.CA Yearly Profit, Operating, Gross MarginsFFH-U.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5 -5 10 15

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1

2. Health

2.1 Basic Checks

FFH-U has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for FFH-U. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
FFH-U.CA Yearly Shares OutstandingFFH-U.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 5M 10M 15M 20M 25M
FFH-U.CA Yearly Total Debt VS Total AssetsFFH-U.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 20B 40B 60B 80B

2.2 Solvency

A Debt/Equity ratio of 0.48 indicates that FFH-U is not too dependend on debt financing.
FFH-U's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. FFH-U is outperformed by 67.44% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.48
Debt/FCF N/A
Altman-Z N/A
ROIC/WACC0.8
WACC7%
FFH-U.CA Yearly LT Debt VS Equity VS FCFFFH-U.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5B 10B 15B 20B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
FFH-U.CA Yearly Current Assets VS Current LiabilitesFFH-U.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B 2.5B

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5

3. Growth

3.1 Past

FFH-U shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.08%.
FFH-U shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.21% yearly.
Looking at the last year, FFH-U shows a quite strong growth in Revenue. The Revenue has grown by 10.27% in the last year.
Measured over the past years, FFH-U shows a quite strong growth in Revenue. The Revenue has been growing by 14.20% on average per year.
EPS 1Y (TTM)-7.08%
EPS 3Y9.62%
EPS 5Y18.21%
EPS Q2Q%-4.63%
Revenue 1Y (TTM)10.27%
Revenue growth 3Y18.08%
Revenue growth 5Y14.2%
Sales Q2Q%-20.01%

3.2 Future

The Earnings Per Share is expected to decrease by -10.20% on average over the next years. This is quite bad
Based on estimates for the next years, FFH-U will show a quite strong growth in Revenue. The Revenue will grow by 12.17% on average per year.
EPS Next Y-2.58%
EPS Next 2Y2.26%
EPS Next 3Y-21.82%
EPS Next 5Y-10.2%
Revenue Next Year19.66%
Revenue Next 2Y12.09%
Revenue Next 3Y14.94%
Revenue Next 5Y12.17%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
FFH-U.CA Yearly Revenue VS EstimatesFFH-U.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 10B 20B 30B
FFH-U.CA Yearly EPS VS EstimatesFFH-U.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 0 50 100 150

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4

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 6.15, the valuation of FFH-U can be described as very cheap.
Based on the Price/Earnings ratio, FFH-U is valued a bit more expensive than the industry average as 65.12% of the companies are valued more cheaply.
FFH-U is valuated cheaply when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 6.32, the valuation of FFH-U can be described as very cheap.
FFH-U's Price/Forward Earnings is on the same level as the industry average.
FFH-U's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.10.
Industry RankSector Rank
PE 6.15
Fwd PE 6.32
FFH-U.CA Price Earnings VS Forward Price EarningsFFH-U.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Industry RankSector Rank
P/FCF N/A
EV/EBITDA N/A
FFH-U.CA Per share dataFFH-U.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 500 1K 1.5K 2K

4.3 Compensation for Growth

A cheap valuation may be justified as FFH-U's earnings are expected to decrease with -21.82% in the coming years.
PEG (NY)N/A
PEG (5Y)0.34
EPS Next 2Y2.26%
EPS Next 3Y-21.82%

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3

5. Dividend

5.1 Amount

FFH-U has a Yearly Dividend Yield of 1.08%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.24, FFH-U's dividend is way lower than its industry peers. On top of this 93.02% of the companies listed in the same industry pay a better dividend than FFH-U!
Compared to an average S&P500 Dividend Yield of 2.33, FFH-U's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 1.08%

5.2 History

The dividend of FFH-U has a limited annual growth rate of 1.33%.
FFH-U has been paying a dividend for over 5 years, so it has already some track record.
FFH-U has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)1.33%
Div Incr Years0
Div Non Decr Years3
FFH-U.CA Yearly Dividends per shareFFH-U.CA Yearly Dividends per shareYearly Dividends per share 2019 2020 2021 2022 2023 2024 2025 5 10

5.3 Sustainability

DP0%
EPS Next 2Y2.26%
EPS Next 3Y-21.82%
FFH-U.CA Yearly Income VS Free CF VS DividendFFH-U.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B -4B 6B

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FAIRFAX FINANCIAL HLDGS LTD

TSX:FFH-U (3/7/2025, 7:00:00 PM)

1420.69

+2.64 (+0.19%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)02-13 2025-02-13/amc
Earnings (Next)04-30 2025-04-30/amc
Inst Owners38.23%
Inst Owner ChangeN/A
Ins Owners4.01%
Ins Owner ChangeN/A
Market Cap34.69B
Analysts78.18
Price Target1565.13 (10.17%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.08%
Yearly Dividend17.64
Dividend Growth(5Y)1.33%
DP0%
Div Incr Years0
Div Non Decr Years3
Ex-Date01-16 2025-01-16 (15)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.69%
Min EPS beat(2)18.24%
Max EPS beat(2)23.14%
EPS beat(4)3
Avg EPS beat(4)8.25%
Min EPS beat(4)-25.87%
Max EPS beat(4)23.14%
EPS beat(8)6
Avg EPS beat(8)11.28%
EPS beat(12)10
Avg EPS beat(12)133.95%
EPS beat(16)14
Avg EPS beat(16)128.44%
Revenue beat(2)2
Avg Revenue beat(2)29.57%
Min Revenue beat(2)19.64%
Max Revenue beat(2)39.5%
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)10.64%
EPS NQ rev (1m)-0.51%
EPS NQ rev (3m)-3.85%
EPS NY rev (1m)-0.03%
EPS NY rev (3m)0.45%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)9.44%
Revenue NY rev (3m)-0.32%
Valuation
Industry RankSector Rank
PE 6.15
Fwd PE 6.32
P/S 0.62
P/FCF N/A
P/OCF N/A
P/B 1.05
P/tB 1.44
EV/EBITDA N/A
EPS(TTM)230.89
EY16.25%
EPS(NY)224.92
Fwd EY15.83%
FCF(TTM)N/A
FCFYN/A
OCF(TTM)N/A
OCFYN/A
SpS2294.55
BVpS1354.19
TBVpS985.63
PEG (NY)N/A
PEG (5Y)0.34
Profitability
Industry RankSector Rank
ROA 4.15%
ROE 16.8%
ROCE 6.95%
ROIC 5.62%
ROICexc 6.09%
ROICexgc 9.25%
OM 15.64%
PM (TTM) 9.91%
GM N/A
FCFM N/A
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y20.29%
OM growth 5Y18.07%
PM growth 3Y-11.16%
PM growth 5Y0.37%
GM growth 3YN/A
GM growth 5YN/A
F-ScoreN/A
Asset Turnover0.42
Health
Industry RankSector Rank
Debt/Equity 0.48
Debt/FCF N/A
Debt/EBITDA N/A
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-ScoreN/A
WACC7%
ROIC/WACC0.8
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-7.08%
EPS 3Y9.62%
EPS 5Y18.21%
EPS Q2Q%-4.63%
EPS Next Y-2.58%
EPS Next 2Y2.26%
EPS Next 3Y-21.82%
EPS Next 5Y-10.2%
Revenue 1Y (TTM)10.27%
Revenue growth 3Y18.08%
Revenue growth 5Y14.2%
Sales Q2Q%-20.01%
Revenue Next Year19.66%
Revenue Next 2Y12.09%
Revenue Next 3Y14.94%
Revenue Next 5Y12.17%
EBIT growth 1Y12.9%
EBIT growth 3Y42.03%
EBIT growth 5Y34.83%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1YN/A
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1YN/A
OCF growth 3YN/A
OCF growth 5YN/A