First American Financial Corporation's (NYSE:FAF) Stock Financial Prospects Look Bleak: Should Shareholders Be Prepared For A Share Price Correction?
First American Financial Corporation's (NYSE:FAF) Stock Financial Prospects Look Bleak: Should Shareholders Be Prepared For A Share Price Correction?
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity First American Financial's (NYSE:FAF) stock up by 3.4% over the past three months. Given that the markets usually pay for the long-term financial health of a company, we wonder if the current momentum in the share price will keep up, given that the company's financials don't look very promising. Particularly, we will be paying attention to First American Financial's ROE today.
first american financial（紐交所：FAF）的股票在過去三個月上漲了3.4%。考慮到市場通常會爲公司的長期財務健康支付，我們想知道在公司財務狀況看起來不是很樂觀的情況下，當前股價的上漲勢頭是否能夠保持。特別是，我們今天會關注first american financial的roe。
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
roe或權益回報率是評估公司有效利用股東投資產生回報效率的有用工具。簡而言之，roe顯示每個股東投資所產生的利潤。
How To Calculate Return On Equity?
如何計算股東權益報酬率？
ROE can be calculated by using the formula:
roe可以通過以下公式計算：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
淨資產收益率 = 淨利潤（來自持續經營） ÷ 股東權益
So, based on the above formula, the ROE for First American Financial is:
因此，根據上述公式，first american financial的roe爲：
1.8% = US$94m ÷ US$5.1b (Based on the trailing twelve months to September 2024).
1.8% = 9400萬美元 ÷ 51億美金（基於截至2024年9月的過去十二個月）。
The 'return' is the profit over the last twelve months. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.02.
「回報」是過去十二個月的利潤。因此，這意味着對於每1美元股東的投資，公司產生的利潤爲0.02美元。
What Has ROE Got To Do With Earnings Growth?
roe與盈利增長有何關係？
So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
到目前爲止，我們已經了解了ROE是衡量公司盈利能力的一個指標。我們現在需要評估公司再投資或「保留」未來增長的利潤量，以此給我們提供公司增長潛力的想法。假設其他所有因素保持不變，ROE和利潤保留率越高，相比不具備這些特徵的公司，這些公司的增長率就越高。
First American Financial's Earnings Growth And 1.8% ROE
first american financial的收益增長和1.8%的roe
It is quite clear that First American Financial's ROE is rather low. Not just that, even compared to the industry average of 14%, the company's ROE is entirely unremarkable. Therefore, it might not be wrong to say that the five year net income decline of 24% seen by First American Financial was possibly a result of it having a lower ROE. We believe that there also might be other aspects that are negatively influencing the company's earnings prospects. Such as - low earnings retention or poor allocation of capital.
很明顯，first american financial的roe相當低。不僅如此，甚至與行業平均14%相比，該公司的roe也完全不顯著。因此，可以說first american financial在過去五年中淨利潤下降24%可能是由於其roe較低的結果。我們認爲，可能還有其他方面對公司收益前景產生負面影響，例如——低收益留存或資本配置不當。
That being said, we compared First American Financial's performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 13% in the same 5-year period.
也就是說，我們將first american financial的表現與行業進行了比較，當我們發現公司雖然縮減了其收益，但該行業在相同的5年期間收益增長率爲13%時感到擔憂。
Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if First American Financial is trading on a high P/E or a low P/E, relative to its industry.
盈利增長是評估股票時一個重要的指標。 投資者需要判斷的是預期的盈利增長或缺乏盈利增長是否已經反映在股價中。 這樣做將有助於他們判斷股票的未來是前景光明還是不妙。 一個很好的預期盈利增長指標是市盈率，它判斷市場願意爲一隻股票支付的價格，基於其盈利前景。因此，您可能想檢查一下first american financial的市盈率是高還是低，相對於其行業。
Is First American Financial Using Its Retained Earnings Effectively?
first american financial是否有效利用其留存收益？
With a high three-year median payout ratio of 90% (implying that 9.6% of the profits are retained), most of First American Financial's profits are being paid to shareholders, which explains the company's shrinking earnings. The business is only left with a small pool of capital to reinvest - A vicious cycle that doesn't benefit the company in the long-run. You can see the 2 risks we have identified for First American Financial by visiting our risks dashboard for free on our platform here.
由於三年期的中位支付比例高達90%（意味着9.6%的利潤被留存），first american financial的大部分利潤都被支付給股東，這也解釋了公司的盈利縮水。 業務僅剩下少量資本用於再投資——這是一個在長期內對公司沒有好處的惡性循環。 您可以訪問我們平台上的風險特斯拉-儀表，免費查看我們爲first american financial識別出的兩個風險。
Additionally, First American Financial has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 34% over the next three years. The fact that the company's ROE is expected to rise to 12% over the same period is explained by the drop in the payout ratio.
此外，first american financial在至少十年的時間裏支付了分紅，這意味着公司的管理層決心支付分紅，即使這意味着幾乎沒有盈利增長。 在研究最新的分析師共識數據後，我們發現公司的未來支付比例預計將在接下來的三年內降至34%。 公司的roe預計會在同一時期上升到12%，這也歸因於支付比例的下降。
Conclusion
結論
Overall, we would be extremely cautious before making any decision on First American Financial. Specifically, it has shown quite an unsatisfactory performance as far as earnings growth is concerned, and a poor ROE and an equally poor rate of reinvestment seem to be the reason behind this inadequate performance. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
總體而言，在對first american financial做出任何決策之前，我們會非常謹慎。具體來說，就盈利增長而言，它的表現非常不理想，較低的roe和同樣較低的再投資率似乎是造成這種不佳表現的原因。話雖如此，我們研究了最新的分析師預測，發現儘管公司在過去有所縮水，但分析師預計其未來盈利會增長。要了解更多關於公司最新的分析師預測，請查看此公司分析師預測的可視化。
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Simply Wall St的這篇文章是一般性質的。我們僅基於歷史數據和分析師預測提供評論，使用公正的方法，我們的文章並非意在提供財務建議。這並不構成買入或賣出任何股票的建議，並且不考慮您的目標或財務狀況。我們旨在爲您帶來基於基礎數據驅動的長期聚焦分析。請注意，我們的分析可能未考慮最新的價格敏感公司公告或定性材料。Simply Wall St對提及的任何股票都沒有持倉。
譯文內容由第三人軟體翻譯。
