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 4 out of 10 to FFH. FFH was compared to 85 industry peers in the Insurance industry. There are concerns on the financial health of FFH while its profitability can be described as average. While showing a medium growth rate, FFH is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
FFH had positive earnings in the past year.
FFH had positive earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: FFH reported negative operating cash flow in multiple years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.15%, FFH belongs to the top of the industry, outperforming 83.72% of the companies in the same industry.
FFH has a Return On Equity of 16.80%. This is amongst the best in the industry. FFH outperforms 83.72% of its industry peers.
FFH's Return On Invested Capital of 5.62% is amongst the best of the industry. FFH outperforms 82.56% of its industry peers.
| Industry Rank | Sector 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
1.3 Margins
FFH has a Profit Margin of 9.91%. This is comparable to the rest of the industry: FFH outperforms 53.49% of its industry peers.
In the last couple of years the Profit Margin of FFH has remained more or less at the same level.
The Operating Margin of FFH (15.64%) is comparable to the rest of the industry.
FFH's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector 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
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), FFH is destroying value.
There is no outstanding debt for FFH. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
A Debt/Equity ratio of 0.48 indicates that FFH is not too dependend on debt financing.
FFH's Debt to Equity ratio of 0.48 is on the low side compared to the rest of the industry. FFH is outperformed by 68.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.48 | ||
| Debt/FCF | N/A | ||
| Altman-Z | N/A |
ROIC/WACC0.8
WACC7%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
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%.
Measured over the past years, FFH shows a quite strong growth in Earnings Per Share. The EPS has been growing by 18.21% on average per year.
FFH shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.27%.
The Revenue has been growing by 14.20% on average over the past years. This is quite good.
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
The Revenue is expected to grow by 12.17% on average over the next years. This is quite good.
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
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
The Price/Earnings ratio is 8.86, which indicates a very decent valuation of FFH.
Based on the Price/Earnings ratio, FFH is valued expensively inside the industry as 83.72% of the companies are valued cheaper.
FFH's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 29.35.
FFH is valuated reasonably with a Price/Forward Earnings ratio of 9.09.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FFH indicates a slightly more expensive valuation: FFH is more expensive than 61.63% of the companies listed in the same industry.
FFH is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.86 | ||
| Fwd PE | 9.09 |
4.2 Price Multiples
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A cheap valuation may be justified as FFH's earnings are expected to decrease with -21.82% in the coming years.
PEG (NY)N/A
PEG (5Y)0.49
EPS Next 2Y2.26%
EPS Next 3Y-21.82%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.08%, FFH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.24, FFH's dividend is way lower than its industry peers. On top of this 94.19% of the companies listed in the same industry pay a better dividend than FFH!
With a Dividend Yield of 1.08, FFH pays less dividend than the S&P500 average, which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
5.2 History
The dividend of FFH has a limited annual growth rate of 1.33%.
FFH has paid a dividend for at least 10 years, which is a reliable track record.
FFH has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.33%
Div Incr Years1
Div Non Decr Years19
5.3 Sustainability
DP0%
EPS Next 2Y2.26%
EPS Next 3Y-21.82%
TSX:FFH (3/7/2025, 7:00:00 PM)
2045.6
+16.77 (+0.83%)
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 Cap49.95B
Analysts78.18
Price Target2470.35 (20.76%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.08% |
Yearly Dividend17.64
Dividend Growth(5Y)1.33%
DP0%
Div Incr Years1
Div Non Decr Years19
Ex-Date
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)8.32%
PT rev (3m)9.96%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.51%
EPS NY rev (1m)0.6%
EPS NY rev (3m)-0.03%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)9.44%
Revenue NY rev (3m)9.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.86 | ||
| Fwd PE | 9.09 | ||
| P/S | 0.89 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.51 | ||
| P/tB | 2.08 | ||
| EV/EBITDA | N/A |
EPS(TTM)230.89
EY11.29%
EPS(NY)224.92
Fwd EY11%
FCF(TTM)N/A
FCFYN/A
OCF(TTM)N/A
OCFYN/A
SpS2294.55
BVpS1354.19
TBVpS985.63
PEG (NY)N/A
PEG (5Y)0.49
Profitability
| Industry Rank | Sector 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 Rank | Sector 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