First American Financial (NYSE:FAF) Posts Earnings Results, Beats Expectations By $0.40 EPS

Key Points

• First American Financial reported earnings of $1.84 per share, exceeding analysts' expectations by $0.40 and a 40.7% revenue increase compared to the same quarter last year.
• The company declared a quarterly dividend increase to $0.55 from $0.54, representing a 3.6% yield and a payout ratio of 121.55%.
• There are mixed ratings from analysts, with three holding "Buy" ratings, one "Hold," and one "Sell," while the average price target is $75.25.

First American Financial (NYSE:FAF - Get Free Report) released its earnings results on Wednesday. The insurance provider reported $1.84 earnings per share for the quarter, beating analysts' consensus estimates of $1.44 by $0.40, RTT News reports. First American Financial had a net margin of 2.90% and a return on equity of 10.41%. During the same period in the prior year, the company earned $1.34 earnings per share. The company's revenue was up 40.7% compared to the same quarter last year.

First American Financial Stock Up 0.6%

Shares of NYSE FAF traded up $0.36 during mid-day trading on Wednesday, reaching $61.43. 850,991 shares of the company were exchanged, compared to its average volume of 847,935. The stock has a market capitalization of $6.25 billion, a P/E ratio of 33.94 and a beta of 1.27. The company's 50-day simple moving average is $64.28 and its 200-day simple moving average is $61.07. First American Financial has a twelve month low of $53.09 and a twelve month high of $70.92.

First American Financial Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, September 29th. Investors of record on Monday, September 22nd were paid a $0.55 dividend. This is a boost from First American Financial's previous quarterly dividend of $0.54. The ex-dividend date was Monday, September 22nd. This represents a $2.20 dividend on an annualized basis and a yield of 3.6%. First American Financial's dividend payout ratio (DPR) is currently 121.55%.

Wall Street Analysts Forecast Growth

Several analysts recently issued reports on the company. Weiss Ratings reiterated a "hold (c+)" rating on shares of First American Financial in a report on Wednesday, October 8th. Wall Street Zen lowered First American Financial from a "buy" rating to a "hold" rating in a research report on Saturday. Keefe, Bruyette & Woods upped their price objective on First American Financial from $77.00 to $79.00 and gave the stock an "outperform" rating in a research note on Monday, July 28th. Finally, Barclays raised their target price on shares of First American Financial from $70.00 to $71.00 and gave the company a "cautious" rating in a research note on Monday, October 6th. Three analysts have rated the stock with a Buy rating, one has issued a Hold rating and one has given a Sell rating to the company's stock. Based on data from MarketBeat.com, the company currently has an average rating of "Hold" and an average price target of $75.25.

First American Financial declared that its Board of Directors has authorized a stock buyback plan on Wednesday, July 23rd that authorizes the company to repurchase $300.00 million in outstanding shares. This repurchase authorization authorizes the insurance provider to purchase up to 5.1% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company's board of directors believes its shares are undervalued.

Insiders Place Their Bets

In other First American Financial news, Director Margaret M. Mccarthy sold 3,500 shares of the firm's stock in a transaction that occurred on Wednesday, August 13th. The shares were sold at an average price of $65.63, for a total transaction of $229,705.00. Following the completion of the sale, the director directly owned 28,095 shares in the company, valued at $1,843,874.85. This trade represents a 11.08% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. 3.70% of the stock is currently owned by corporate insiders.

Institutional Trading of First American Financial

Several hedge funds have recently added to or reduced their stakes in the company. EverSource Wealth Advisors LLC grew its holdings in First American Financial by 189.5% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 912 shares of the insurance provider's stock valued at $56,000 after buying an additional 597 shares in the last quarter. Jones Financial Companies Lllp lifted its holdings in shares of First American Financial by 121.3% during the first quarter. Jones Financial Companies Lllp now owns 1,483 shares of the insurance provider's stock worth $97,000 after buying an additional 813 shares in the last quarter. Headlands Technologies LLC acquired a new stake in shares of First American Financial during the second quarter worth $186,000. Focus Partners Wealth boosted its position in shares of First American Financial by 11.3% in the first quarter. Focus Partners Wealth now owns 4,282 shares of the insurance provider's stock valued at $281,000 after acquiring an additional 435 shares during the period. Finally, MML Investors Services LLC grew its stake in shares of First American Financial by 25.4% in the second quarter. MML Investors Services LLC now owns 10,738 shares of the insurance provider's stock valued at $659,000 after acquiring an additional 2,173 shares in the last quarter. 89.05% of the stock is owned by institutional investors and hedge funds.

About First American Financial

First American Financial Corporation, through its subsidiaries, provides financial services. It operates through Title Insurance and Services, and Home Warranty segments. The Title Insurance and Services segment issues title insurance policies on residential and commercial property, as well as offers related products and services internationally.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.