FAIRFAX FINANCIAL HLDGS LTD (FFH.CA) Stock Fundamental Analysis
TSX:FFH - Toronto Stock Exchange - CA3039011026 - Common Stock - Currency: CAD
We assign a fundamental rating of 5 out of 10 to FFH. FFH was compared to 80 industry peers in the Insurance industry. FFH has a medium profitability rating, but doesn't score so well on its financial health evaluation. FFH has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year FFH was profitable.
FFH had a positive operating cash flow in the past year.
Each year in the past 5 years FFH has been profitable.
In multiple years FFH reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.01%, FFH belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
FFH has a better Return On Equity (16.12%) than 88.75% of its industry peers.
With a decent Return On Invested Capital value of 5.10%, FFH is doing good in the industry, outperforming 75.00% of the companies in the same industry.
FFH had an Average Return On Invested Capital over the past 3 years of 4.73%. This is in line with the industry average of 2.83%.
The last Return On Invested Capital (5.10%) for FFH is above the 3 year average (4.73%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.01% | ||
| ROE | 16.12% | ||
| ROIC | 5.1% |
ROA(3y)4.31%
ROA(5y)3.41%
ROE(3y)17.47%
ROE(5y)14.83%
ROIC(3y)4.73%
ROIC(5y)3.3%
1.3 Margins
FFH has a Profit Margin (10.02%) which is in line with its industry peers.
In the last couple of years the Profit Margin of FFH has remained more or less at the same level.
FFH has a Operating Margin of 14.76%. This is amonst the worse of the industry: FFH underperforms 93.75% of its industry peers.
FFH's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.76% | ||
| PM (TTM) | 10.02% | ||
| GM | N/A |
OM growth 3Y17.07%
OM growth 5Y16.16%
PM growth 3Y-10.7%
PM growth 5Y0.68%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
FFH has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, FFH has less shares outstanding
Compared to 5 years ago, FFH has less shares outstanding
FFH has a worse debt/assets ratio than last year.
2.2 Solvency
FFH has a debt to FCF ratio of 3.28. This is a good value and a sign of high solvency as FFH would need 3.28 years to pay back of all of its debts.
The Debt to FCF ratio of FFH (3.28) is worse than 68.75% of its industry peers.
A Debt/Equity ratio of 0.49 indicates that FFH is not too dependend on debt financing.
FFH has a worse Debt to Equity ratio (0.49) than 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.28 | ||
| Altman-Z | N/A |
ROIC/WACC0.76
WACC6.72%
2.3 Liquidity
A Current Ratio of 0.52 indicates that FFH may have some problems paying its short term obligations.
FFH's Current ratio of 0.52 is amongst the best of the industry. FFH outperforms 83.75% of its industry peers.
A Quick Ratio of 0.52 indicates that FFH may have some problems paying its short term obligations.
FFH has a Quick ratio of 0.52. This is amongst the best in the industry. FFH outperforms 83.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
FFH shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.08%.
The Earnings Per Share has been growing by 18.21% on average over the past years. This is quite good.
Looking at the last year, FFH shows a quite strong growth in Revenue. The Revenue has grown by 9.22% in the last year.
FFH shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.88% yearly.
EPS 1Y (TTM)-7.08%
EPS 3Y9.62%
EPS 5Y18.21%
EPS Q2Q%-4.63%
Revenue 1Y (TTM)9.22%
Revenue growth 3Y17.53%
Revenue growth 5Y13.88%
Sales Q2Q%-20.01%
3.2 Future
The Earnings Per Share is expected to decrease by -5.80% on average over the next years.
The Revenue is expected to grow by 12.47% on average over the next years. This is quite good.
EPS Next Y-2.62%
EPS Next 2Y4.02%
EPS Next 3Y-3.62%
EPS Next 5Y-5.8%
Revenue Next Year28.73%
Revenue Next 2Y17.18%
Revenue Next 3Y18.16%
Revenue Next 5Y12.47%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.52, the valuation of FFH can be described as very reasonable.
85.00% of the companies in the same industry are cheaper than FFH, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.87, FFH is valued rather cheaply.
A Price/Forward Earnings ratio of 9.77 indicates a reasonable valuation of FFH.
61.25% of the companies in the same industry are cheaper than FFH, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.38. FFH is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.52 | ||
| Fwd PE | 9.77 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, FFH is valued a bit cheaper than 67.50% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, FFH is valued expensively inside the industry as 87.50% of the companies are valued cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.36 | ||
| EV/EBITDA | 7.14 |
4.3 Compensation for Growth
The decent profitability rating of FFH may justify a higher PE ratio.
A cheap valuation may be justified as FFH's earnings are expected to decrease with -3.62% in the coming years.
PEG (NY)N/A
PEG (5Y)0.52
EPS Next 2Y4.02%
EPS Next 3Y-3.62%
5. Dividend
5.1 Amount
FFH has a Yearly Dividend Yield of 1.03%.
Compared to an average industry Dividend Yield of 4.51, FFH's dividend is way lower than its industry peers. On top of this 95.00% of the companies listed in the same industry pay a better dividend than FFH!
With a Dividend Yield of 1.03, FFH pays less dividend than the S&P500 average, which is at 2.46.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
5.2 History
The dividend of FFH is nicely growing with an annual growth rate of 16.96%!
FFH has been paying a dividend for at least 10 years, so it has a reliable track record.
FFH has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.96%
Div Incr Years1
Div Non Decr Years19
5.3 Sustainability
FFH pays out 15.09% of its income as dividend. This is a sustainable payout ratio.
DP15.09%
EPS Next 2Y4.02%
EPS Next 3Y-3.62%
TSX:FFH (4/28/2025, 7:00:00 PM)
2124.43
+1.36 (+0.06%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners38.23%
Inst Owner ChangeN/A
Ins Owners4.01%
Ins Owner ChangeN/A
Market Cap51.47B
Analysts78.18
Price Target2507.5 (18.03%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.03% |
Yearly Dividend35.11
Dividend Growth(5Y)16.96%
DP15.09%
Div Incr Years1
Div Non Decr Years19
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)26.1%
Min EPS beat(2)23.14%
Max EPS beat(2)29.06%
EPS beat(4)3
Avg EPS beat(4)10.96%
Min EPS beat(4)-25.87%
Max EPS beat(4)29.06%
EPS beat(8)6
Avg EPS beat(8)12.63%
EPS beat(12)10
Avg EPS beat(12)134.85%
EPS beat(16)14
Avg EPS beat(16)129.12%
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)1.5%
PT rev (3m)11.62%
EPS NQ rev (1m)0.28%
EPS NQ rev (3m)-22.07%
EPS NY rev (1m)0.26%
EPS NY rev (3m)-0.07%
Revenue NQ rev (1m)-2.03%
Revenue NQ rev (3m)-2.03%
Revenue NY rev (1m)7.58%
Revenue NY rev (3m)17.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.52 | ||
| Fwd PE | 9.77 | ||
| P/S | 0.96 | ||
| P/FCF | 10.36 | ||
| P/OCF | 9.3 | ||
| P/B | 1.54 | ||
| P/tB | 2.35 | ||
| EV/EBITDA | 7.14 |
EPS(TTM)223.23
EY10.51%
EPS(NY)217.37
Fwd EY10.23%
FCF(TTM)205.1
FCFY9.65%
OCF(TTM)228.49
OCFY10.76%
SpS2214.54
BVpS1376.89
TBVpS903.31
PEG (NY)N/A
PEG (5Y)0.52
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.01% | ||
| ROE | 16.12% | ||
| ROCE | 6.3% | ||
| ROIC | 5.1% | ||
| ROICexc | 5.26% | ||
| ROICexgc | 7.99% | ||
| OM | 14.76% | ||
| PM (TTM) | 10.02% | ||
| GM | N/A | ||
| FCFM | 9.26% |
ROA(3y)4.31%
ROA(5y)3.41%
ROE(3y)17.47%
ROE(5y)14.83%
ROIC(3y)4.73%
ROIC(5y)3.3%
ROICexc(3y)4.89%
ROICexc(5y)3.43%
ROICexgc(3y)6.61%
ROICexgc(5y)4.68%
ROCE(3y)5.85%
ROCE(5y)4.08%
ROICexcg growth 3Y29.31%
ROICexcg growth 5Y23.47%
ROICexc growth 3Y31.25%
ROICexc growth 5Y24.09%
OM growth 3Y17.07%
OM growth 5Y16.16%
PM growth 3Y-10.7%
PM growth 5Y0.68%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.4
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 3.28 | ||
| Debt/EBITDA | 1.82 | ||
| Cap/Depr | 54.23% | ||
| Cap/Sales | 1.06% | ||
| Interest Coverage | 10.09 | ||
| Cash Conversion | 61.75% | ||
| Profit Quality | 92.4% | ||
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | N/A |
F-Score6
WACC6.72%
ROIC/WACC0.76
Cap/Depr(3y)57.82%
Cap/Depr(5y)49.56%
Cap/Sales(3y)1.28%
Cap/Sales(5y)1.35%
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-2.62%
EPS Next 2Y4.02%
EPS Next 3Y-3.62%
EPS Next 5Y-5.8%
Revenue 1Y (TTM)9.22%
Revenue growth 3Y17.53%
Revenue growth 5Y13.88%
Sales Q2Q%-20.01%
Revenue Next Year28.73%
Revenue Next 2Y17.18%
Revenue Next 3Y18.16%
Revenue Next 5Y12.47%
EBIT growth 1Y5.57%
EBIT growth 3Y37.58%
EBIT growth 5Y32.28%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y747.72%
FCF growth 3Y-17.08%
FCF growth 5Y28.19%
OCF growth 1Y10236.8%
OCF growth 3Y-15.59%
OCF growth 5Y24.13%