Fidelity National Financial (NYSE:FNF) and FirstCash (NASDAQ:FCFS) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.
Earnings and Valuation
This table compares Fidelity National Financial and FirstCash's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Fidelity National Financial | $7.93 billion | 1.38 | $1.06 billion | $3.39 | 11.06 |
FirstCash | $1.86 billion | 1.51 | $164.62 million | $3.89 | 17.63 |
Fidelity National Financial has higher revenue and earnings than FirstCash. Fidelity National Financial is trading at a lower price-to-earnings ratio than FirstCash, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Fidelity National Financial has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, FirstCash has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500.
Dividends
Fidelity National Financial pays an annual dividend of $1.44 per share and has a dividend yield of 3.8%. FirstCash pays an annual dividend of $1.08 per share and has a dividend yield of 1.6%. Fidelity National Financial pays out 42.5% of its earnings in the form of a dividend. FirstCash pays out 27.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Fidelity National Financial has raised its dividend for 2 consecutive years and FirstCash has raised its dividend for 1 consecutive years. Fidelity National Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of current recommendations and price targets for Fidelity National Financial and FirstCash, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Fidelity National Financial | 0 | 1 | 3 | 0 | 2.75 |
FirstCash | 0 | 1 | 3 | 0 | 2.75 |
Fidelity National Financial presently has a consensus target price of $38.75, suggesting a potential upside of 3.39%. FirstCash has a consensus target price of $77.3333, suggesting a potential upside of 12.75%. Given FirstCash's higher possible upside, analysts clearly believe FirstCash is more favorable than Fidelity National Financial.
Insider & Institutional Ownership
76.4% of Fidelity National Financial shares are held by institutional investors. Comparatively, 95.0% of FirstCash shares are held by institutional investors. 5.8% of Fidelity National Financial shares are held by company insiders. Comparatively, 2.6% of FirstCash shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Fidelity National Financial and FirstCash's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Fidelity National Financial | 10.31% | 20.07% | 4.06% |
FirstCash | 7.37% | 11.48% | 6.30% |
Summary
Fidelity National Financial beats FirstCash on 8 of the 15 factors compared between the two stocks.