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First American Financial remains undervalued at a 10x forward P/E and offers a well-covered 3% dividend yield. FAF's commercial segment drove 15% YoY revenue growth, with record ARPO and expanding trust and 1031 exchange deposits. AI-driven platforms like Endpoint and Sequoia are delivering measurable productivity gains, supporting margin expansion and future competitive advantage.

SANTA ANA, Calif.--(BUSINESS WIRE)--First American Financial Corporation (NYSE: FAF), a premier provider of title, settlement, and risk solutions for real estate transactions and the leader in the digital transformation of its industry, today announced that Sally French Tyler, president of First American Title Insurance Company, was named a winner of HousingWire's 2026 Vanguard Award. Tyler joins an exclusive group of two-time winners of the award, as she was previously recognized in 2024. The.

First American Exchange Company Launches The 1031 Brief™ Podcast to Help Real Estate Investors and Advisors Better Understand 1031 Exchange Planning First American Exchange Company, a Qualified Intermediary providing a comprehensive suite of 1031 exchange services and a subsidiary of First American Title Insurance Company, today announced the launch of The 1031 Brief™podcast. Hosted by Ashley Stefan, divisional counsel for First American Exchange Company and a leading voice in the 1031 exchange industry, The 1031 Brief delivers clear, practical conversations that simplify 1031 exchange concepts, planning considerations, market dynamics and common transaction challenges for real estate investors and the professionals who advise them.

Published monthly, the podcast is designed to make complex topics more approachable and actionable for real estate investors and the professionals who advise them, including brokers, CPAs, attorneys, registered investment advisors, title and escrow professionals, and anyone interested in investment real estate. By helping listeners build a stronger understanding of the 1031 exchange process before a sale is underway, The 1031 Brief aims to support earlier conversations between investors and their tax, legal and financial advisors—well before critical transaction deadlines begin.

"A successful 1031 exchange often begins long before a property goes on the market. The earlier investors understand their options, the more flexibility they'll have when important decisions arise," said Stefan. "This podcast is designed to help listeners understand the questions they should ask and the steps they can take earlier in the process, so they're better prepared to work with their tax and legal advisors on important real estate decisions."

Launching with a focus on 1031 exchange basics, the podcast explores topics such as what a 1031 exchange is, what "like-kind" means in the context of investment real estate, and how evolving market conditions can influence exchange planning. Future episodes will feature practical planning discussions, expert interviews and insights intended to help both investors and their advisors better navigate real-world exchange scenarios.

Stream The 1031 Brief podcast on major podcast platforms, the First American Exchange Company website, www.firstexchange.com, or YouTube.

Launch episodes of The 1031 Brief podcast include:

What is a 1031 Exchange?How Does the Market Affect 1031 Planning?Are you Leaving Money on the Table?Disclaimer

The 1031 Brief is intended solely for educational purposes and does not constitute legal, tax, financial or investment advice. Listeners should consult their own tax advisors and legal counsel regarding their individual circumstances.

About The 1031 Brief™

The 1031 Brief is a monthly educational podcast from First American Exchange Company exploring the people, market trends and planning strategies shaping today's 1031 exchange landscape. Hosted by Divisional Counsel Ashley Stefan, each episode features practical conversations with experienced professionals designed to help investors and their advisors make more informed real estate decisions.

About First American Exchange Company

First American Exchange Company is a Qualified Intermediary and a subsidiary of First American Title Insurance Company, providing a comprehensive suite of 1031 exchange services for investors seeking tax-deferred exchanges under Section 1031 of the Internal Revenue Code. Through experienced professionals, educational resources and responsive service, the company helps investors and their advisors successfully navigate exchange transactions from planning through completion.

About First American Title Insurance Company

First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. First American Title provides comprehensive title insurance coverage and professional services for real estate purchases, construction, refinances and equity loans. For more information, visit www.firstam.com/title.

About First American

First American Financial Corporation (NYSE: FAF) is a premier provider of title, settlement, and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 135 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.5 billion in 2025, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2026, First American was named one of the 100 Best Companies to Work For by Great Place to Work® and Fortune Magazine for the eleventh consecutive year. More information about the company can be found at www.firstam.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260825703754/en/

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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Caisse de depot et placement du Quebec purchased a new stake in shares of First American Financial Corporation (NYSE:FAF – Free Report) in the 2nd quarter, according to its most recent filing with the Securities & Exchange Commission. The firm purchased 24,700 shares of the insurance provider’s stock, valued at approximately $1,694,000.

A number of other large investors also recently bought and sold shares of FAF. Jones Financial Companies Lllp boosted its position in First American Financial by 121.3% in the 1st quarter. Jones Financial Companies Lllp now owns 1,483 shares of the insurance provider’s stock worth $97,000 after purchasing an additional 813 shares in the last quarter. Goldman Sachs Group Inc. grew its stake in shares of First American Financial by 10.8% during the 1st quarter. Goldman Sachs Group Inc. now owns 293,058 shares of the insurance provider’s stock worth $19,233,000 after purchasing an additional 28,666 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its holdings in shares of First American Financial by 7.1% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 414,146 shares of the insurance provider’s stock valued at $27,180,000 after purchasing an additional 27,600 shares in the last quarter. Jane Street Group LLC increased its holdings in shares of First American Financial by 182.5% during the 1st quarter. Jane Street Group LLC now owns 67,572 shares of the insurance provider’s stock valued at $4,435,000 after purchasing an additional 43,651 shares in the last quarter. Finally, Focus Partners Wealth lifted its stake in shares of First American Financial by 11.3% in the 1st quarter. Focus Partners Wealth now owns 4,282 shares of the insurance provider’s stock valued at $281,000 after purchasing an additional 435 shares during the period. 89.05% of the stock is owned by institutional investors and hedge funds.

First American Financial News Roundup Here are the key news stories impacting First American Financial this week:

Positive Sentiment: Zacks raised its FY2026 EPS forecast to $7.04 from $7.01, FY2027 EPS to $7.39 from $7.32, and FY2028 EPS to $7.43 from $7.35. The revisions suggest improving expectations for First American Financial’s earnings outlook. MarketBeat First American Financial research report Positive Sentiment: Quarterly estimates were also increased: Q3 2026 EPS rose to $1.85 from $1.83, Q4 2026 to $1.78 from $1.77, Q1 2027 to $1.28 from $1.27, Q2 2027 to $2.05 from $2.04, Q3 2027 to $1.98 from $1.95, and Q4 2027 to $2.08 from $2.06. While each adjustment was small, the consistency across periods is a constructive signal. MarketBeat First American Financial earnings estimates Positive Sentiment: A Zacks article highlighted FAF as a potential dividend stock, potentially reinforcing its appeal to income-oriented investors. The company’s valuation and shareholder-return profile may provide additional support if dividend sustainability remains attractive. Why First American Financial is a Top Dividend Stock Neutral Sentiment: Despite the higher forecasts, Zacks maintained its Hold recommendation. The current-year consensus EPS estimate remains $7.11, above Zacks’ $7.04 forecast, indicating that the upgrades have not yet produced a broadly bullish analyst view. Insiders Place Their Bets In other First American Financial news, CAO Steven A. Adams sold 3,253 shares of the business’s stock in a transaction that occurred on Friday, July 24th. The stock was sold at an average price of $74.99, for a total transaction of $243,942.47. Following the completion of the sale, the chief accounting officer directly owned 10,234 shares in the company, valued at approximately $767,447.66. The trade was a 24.12% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Corporate insiders own 3.50% of the company’s stock. First American Financial Price Performance Shares of NYSE:FAF opened at $74.50 on Friday. The business’s 50 day moving average price is $72.03 and its 200-day moving average price is $67.95. First American Financial Corporation has a 1 year low of $56.20 and a 1 year high of $79.87. The firm has a market capitalization of $7.61 billion, a price-to-earnings ratio of 10.32, a price-to-earnings-growth ratio of 0.69 and a beta of 1.22.

First American Financial (NYSE:FAF – Get Free Report) last issued its quarterly earnings results on Wednesday, July 22nd. The insurance provider reported $2.08 EPS for the quarter, topping the consensus estimate of $1.80 by $0.28. The company had revenue of $2.11 billion during the quarter, compared to analyst estimates of $2.03 billion. First American Financial had a net margin of 9.33% and a return on equity of 13.31%. The firm’s revenue was up 15.0% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $1.53 EPS. On average, sell-side analysts expect that First American Financial Corporation will post 7.11 earnings per share for the current year.

Wall Street Analysts Forecast Growth A number of analysts recently issued reports on the stock. Stephens reissued an “overweight” rating and set a $84.00 price target on shares of First American Financial in a report on Friday, June 12th. Keefe, Bruyette & Woods lifted their price objective on shares of First American Financial from $84.00 to $86.00 and gave the company an “outperform” rating in a report on Friday, July 24th. Zacks Research downgraded shares of First American Financial from a “strong-buy” rating to a “hold” rating in a research report on Tuesday, June 23rd. Barclays upped their price objective on shares of First American Financial from $80.00 to $83.00 and gave the stock an “overweight” rating in a research report on Tuesday, July 7th. Finally, Weiss Ratings restated a “buy (b)” rating on shares of First American Financial in a research report on Monday, July 20th. Seven research analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the company’s stock. According to MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $84.60.

Get Our Latest Research Report on FAF

(Free Report)

First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals.

The company’s title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions.

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Barrow Hanley Mewhinney & Strauss LLC bought a new position in First American Financial Corporation (NYSE:FAF – Free Report) in the 2nd quarter, according to its most recent disclosure with the Securities & Exchange Commission. The fund bought 380,607 shares of the insurance provider’s stock, valued at approximately $26,106,000. Barrow Hanley Mewhinney & Strauss LLC owned about 0.37% of First American Financial as of its most recent filing with the Securities & Exchange Commission.

Several other hedge funds and other institutional investors have also recently made changes to their positions in FAF. Jones Financial Companies Lllp lifted its position in 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 valued at $97,000 after purchasing an additional 813 shares during the period. Goldman Sachs Group Inc. raised its holdings in First American Financial by 10.8% in the 1st quarter. Goldman Sachs Group Inc. now owns 293,058 shares of the insurance provider’s stock worth $19,233,000 after purchasing an additional 28,666 shares during the period. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC raised its stake in shares of First American Financial by 7.1% in the first quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 414,146 shares of the insurance provider’s stock worth $27,180,000 after buying an additional 27,600 shares during the period. Jane Street Group LLC raised its stake in First American Financial by 182.5% during the 1st quarter. Jane Street Group LLC now owns 67,572 shares of the insurance provider’s stock worth $4,435,000 after acquiring an additional 43,651 shares during the period. Finally, Focus Partners Wealth lifted its stake in shares of First American Financial by 11.3% during the 1st quarter. Focus Partners Wealth now owns 4,282 shares of the insurance provider’s stock valued at $281,000 after buying an additional 435 shares in the last quarter. Institutional investors own 89.05% of the company’s stock.

First American Financial Stock Performance Shares of FAF opened at $71.78 on Monday. The stock has a 50-day moving average of $71.45 and a two-hundred day moving average of $67.70. The stock has a market cap of $7.33 billion, a P/E ratio of 9.94, a P/E/G ratio of 0.66 and a beta of 1.22. First American Financial Corporation has a one year low of $56.20 and a one year high of $79.87.

First American Financial (NYSE:FAF – Get Free Report) last announced its quarterly earnings results on Wednesday, July 22nd. The insurance provider reported $2.08 earnings per share for the quarter, topping the consensus estimate of $1.80 by $0.28. The company had revenue of $2.11 billion for the quarter, compared to the consensus estimate of $2.03 billion. First American Financial had a return on equity of 13.31% and a net margin of 9.33%.The firm’s revenue for the quarter was up 15.0% compared to the same quarter last year. During the same period last year, the firm earned $1.53 EPS. Analysts predict that First American Financial Corporation will post 7.11 EPS for the current fiscal year. Insider Transactions at First American Financial In other news, CAO Steven A. Adams sold 3,253 shares of the company’s stock in a transaction that occurred on Friday, July 24th. The stock was sold at an average price of $74.99, for a total value of $243,942.47. Following the completion of the sale, the chief accounting officer directly owned 10,234 shares in the company, valued at $767,447.66. This represents a 24.12% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 3.50% of the stock is currently owned by company insiders.

Analyst Ratings Changes Several research firms recently weighed in on FAF. Stephens reaffirmed an “overweight” rating and set a $84.00 target price on shares of First American Financial in a research note on Friday, June 12th. Weiss Ratings reissued a “buy (b)” rating on shares of First American Financial in a research report on Monday, July 20th. Benchmark began coverage on shares of First American Financial in a research note on Tuesday, July 21st. They issued a “buy” rating and a $85.00 price objective for the company. Barclays lifted their target price on First American Financial from $80.00 to $83.00 and gave the stock an “overweight” rating in a research report on Tuesday, July 7th. Finally, Keefe, Bruyette & Woods boosted their price target on First American Financial from $84.00 to $86.00 and gave the company an “outperform” rating in a report on Friday, July 24th. Seven research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. According to data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $84.60.

Read Our Latest Report on First American Financial

(Free Report)

First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals.

The company’s title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions.

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A month has gone by since the last earnings report for First American Financial (FAF - Free Report) . Shares have added about 4.4% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is First American Financial due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for First American Financial Corporation before we dive into how investors and analysts have reacted as of late.

FAF Q2 Earnings Top Estimates on Title Strength, Investment Income

First American Financial Corporation reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%.

The quarterly results benefited from robust commercial title business, higher average revenue per order, solid investment income growth and continued strength in information and subservicing businesses. Elevated operating expenses partly offset these gains.

What’s Behind the Headlines for FAF?Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. The figure exceeded the Zacks Consensus Estimate and our model estimate by 2.3%. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year, supported by higher interest income from the investment portfolio. The title segment increased 12% in investment income, partially offset by losses at the corporate level. The figure was above our estimate and the Zacks Consensus Estimate of $182.3 million.

Expenses increased 11.4% to $1.83 billion, primarily due to higher personnel costs, production expenses, premiums retained by agents and a rise in interest expense. The figure was above our estimate of $1.80 billion.

FAF’s Segmental ResultsTitle Insurance and Services: Total revenues rose 16.9% year over year to $2 billion, which beat the Zacks Consensus Estimate by 6.2%. This was driven by 15% growth in direct premiums and escrow fees, agent premiums and steady net investment income. Investment income increased 11% to $164 million, supported by higher interest income from the company's investment portfolio.
Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300. Average revenue per direct title order increased to $4,572, reflecting a 31% increase in commercial average revenue per order, partially offset by a mix shift toward lower-premium refinance transactions.

Home Warranty: Total revenues rose 3.3% to $113.8 million, exceeding our model estimate of $111 million. Pretax income climbed 8.5% year over year to $24.2 million. The claim loss rate improved to 40%, due to lower claim frequency, partly offset by higher claim severity. Pretax margin expanded 110 basis points to 21.3%.

Corporate: The Corporate segment reported a net pretax loss of $56.2 million, narrowing from a $43.8 million loss in the year-ago quarter.

FAF’s Financial UpdateFirst American exited the second quarter of 2026 with cash and cash equivalents of $2.6 billion, up 89.6% from the 2025-end level. Notes and contracts payable were $1.5 billion, remaining flat from the 2025-end level. Stockholders’ equity was $5.6 billion at the end of the second quarter of 2026, up 2.2% from the 2025-end level. The debt-to-capital ratio was 31.4.

Capital DeploymentThe board of directors paid a dividend of 55 per cent per share in the second quarter. FAF repurchased 0.3 million shares for $20 million in the reported quarter at an average price of $61.99 per share.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in fresh estimates.

The consensus estimate has shifted 6.84% due to these changes.

VGM ScoresCurrently, First American Financial has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise First American Financial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry PlayerFirst American Financial belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Progressive (PGR - Free Report) , has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Progressive reported revenues of $23.01 billion in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $4.85 for the same period compares with $4.88 a year ago.

Progressive is expected to post earnings of $3.77 per share for the current quarter, representing a year-over-year change of -6.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.7%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Progressive. Also, the stock has a VGM Score of B.

Advisors Capital Management LLC acquired a new stake in First American Financial Corporation (NYSE:FAF – Free Report) in the second quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor acquired 66,886 shares of the insurance provider’s stock, valued at approximately $4,588,000. Advisors Capital Management LLC owned about 0.07% of First American Financial at the end of the most recent reporting period.

A number of other hedge funds and other institutional investors have also modified their holdings of the business. BlackRock Inc. purchased a new stake in First American Financial during the 2nd quarter worth approximately $643,570,000. Boston Partners boosted its stake in shares of First American Financial by 8.9% during the 3rd quarter. Boston Partners now owns 6,133,594 shares of the insurance provider’s stock valued at $393,690,000 after buying an additional 500,649 shares during the last quarter. Northwestern Mutual Wealth Management Co. boosted its stake in shares of First American Financial by 4,485,375.2% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 5,786,263 shares of the insurance provider’s stock valued at $355,508,000 after buying an additional 5,786,134 shares during the last quarter. Dimensional Fund Advisors LP grew its position in shares of First American Financial by 5.6% during the first quarter. Dimensional Fund Advisors LP now owns 4,636,464 shares of the insurance provider’s stock worth $279,529,000 after buying an additional 245,279 shares in the last quarter. Finally, Capital Research Global Investors grew its position in shares of First American Financial by 3.3% during the fourth quarter. Capital Research Global Investors now owns 3,415,825 shares of the insurance provider’s stock worth $209,868,000 after buying an additional 109,242 shares in the last quarter. 89.05% of the stock is owned by hedge funds and other institutional investors.

First American Financial Stock Performance First American Financial stock opened at $72.05 on Friday. The firm’s 50-day moving average is $71.33 and its 200-day moving average is $67.64. First American Financial Corporation has a 1 year low of $56.20 and a 1 year high of $79.87. The company has a market cap of $7.36 billion, a P/E ratio of 9.98, a PEG ratio of 0.67 and a beta of 1.22.

First American Financial (NYSE:FAF – Get Free Report) last released its quarterly earnings data on Wednesday, July 22nd. The insurance provider reported $2.08 earnings per share for the quarter, topping the consensus estimate of $1.80 by $0.28. The firm had revenue of $2.11 billion for the quarter, compared to analyst estimates of $2.03 billion. First American Financial had a net margin of 9.33% and a return on equity of 13.31%. First American Financial’s quarterly revenue was up 15.0% on a year-over-year basis. During the same quarter in the prior year, the business earned $1.53 earnings per share. As a group, sell-side analysts predict that First American Financial Corporation will post 7.11 earnings per share for the current year. Insider Transactions at First American Financial In other First American Financial news, CAO Steven A. Adams sold 3,253 shares of the firm’s stock in a transaction on Friday, July 24th. The stock was sold at an average price of $74.99, for a total value of $243,942.47. Following the sale, the chief accounting officer directly owned 10,234 shares in the company, valued at approximately $767,447.66. This trade represents a 24.12% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Insiders own 3.50% of the company’s stock.

Wall Street Analyst Weigh In FAF has been the topic of several recent analyst reports. Truist Financial upped their price target on shares of First American Financial from $82.00 to $85.00 and gave the company a “buy” rating in a report on Friday, April 24th. Barclays raised their price objective on shares of First American Financial from $80.00 to $83.00 and gave the stock an “overweight” rating in a report on Tuesday, July 7th. Weiss Ratings reissued a “buy (b)” rating on shares of First American Financial in a research report on Monday, July 20th. Stephens restated an “overweight” rating and issued a $84.00 target price on shares of First American Financial in a research note on Friday, June 12th. Finally, Keefe, Bruyette & Woods increased their price target on shares of First American Financial from $84.00 to $86.00 and gave the stock an “outperform” rating in a research report on Friday, July 24th. Seven analysts have rated the stock with a Buy rating and one has issued a Hold rating to the stock. According to data from MarketBeat, First American Financial currently has a consensus rating of “Moderate Buy” and an average target price of $84.60.

Get Our Latest Analysis on FAF

First American Financial Company Profile (Free Report)

First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals.

The company’s title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions.

Featured Stories Five stocks we like better than First American Financial 3 Energy Stocks Raising Dividends as the Sector Surges 5 Reasons the S&P 500 Could Keep Rallying Through Year-End Walmart’s Post-Earnings Drop Could Be a Buying Opportunity The Trade Desk’s Earnings Miss Raises a Bigger Question About Its AI Future Want to see what other hedge funds are holding FAF? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for First American Financial Corporation (NYSE:FAF – Free Report).

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For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: First American Financial (FAF - Free Report) Headquartered in Santa Ana, CA, First American Financial Corporation, through its subsidiaries, provides title insurance, settlement services and other financial services and risk solutions to homeowners and lenders. Its revenues are reported under the title insurance and services segment and the home warranty segment.

FAF is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 10.42; value investors should take notice.

For fiscal 2026, four analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.30 to $7.11 per share. FAF boasts an average earnings surprise of +23.6%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, FAF should be on investors' short list.

Key Takeaways FAF's commercial revenues rose 34% year over year to $314 million in Q2 2026.AI platforms are boosting automation, with Endpoint reaching 39% and SEQUOIA refinance automation at 40%.Investment income rose 14.7% to $183.7 million, while strong liquidity supports dividends and buybacks. Shares of First American Financial Corporation (FAF - Free Report) are trading at a discount compared with the industry. Its 12-month trailing price-to-book value of 1.3X is lower than the industry average of 17.2X, the Finance sector’s 4.5X and the Zacks S&P 500 composite’s 7.34X. The stock has a Value Score of A. This style score helps find the most attractive value stocks.

Image Source: Zacks Investment Research

The insurer has a market capitalization of $7.32 billion. The average volume of shares traded in the last three months was 0.9 million. The insurer has a solid track record of beating earnings estimates in the past four quarters, with an average of 23.6%.

Shares of some other insurers like RenaissanceRe Holdings Ltd. (RNR - Free Report) , NMI Holdings Inc. (NMIH - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) are also trading at a discount to the industry average.

FAF is an OutperformerFirst American shares have risen 16.7% year-to-date, outperforming the industry’s growth of 4.4%.

Image Source: Zacks Investment Research

Shares of RNR, NMIH and AXS have gained 31%, 8.2% and 16.8%, respectively, year-to-date.

Average Target Price for FAF Suggests UpsideBased on short-term price targets offered by five analysts, the Zacks average price target is $88.20 per share. The average suggests a potential 23% upside from the last closing price.    

 

Image Source: Zacks Investment Research

FAF’s Growth Projection EncouragesThe Zacks Consensus Estimate for First American’s 2026 earnings per share (EPS) indicates a year-over-year increase of 16%. The consensus estimate for revenues is pegged at $8.1 billion, implying a year-over-year improvement of 8.5%.

The consensus estimate for 2027 EPS and revenues indicates an increase of 4.8% and 6.4%, respectively, from the corresponding 2026 estimates.

The expected long-term earnings growth rate is 15.2%, outperforming the industry average of 7.2%.

Optimist Analyst Sentiment on FAFThe company has witnessed three upward earnings estimate revisions for 2026 and 2027 over the past 30 days compared to one downward revision. Thus, the Zacks Consensus Estimate for 2026 and 2027 earnings has moved up 4% and 2.9%, respectively, over the same period.

FAF’s Efficient Use of Shareholder CapitalFirst American’s trailing 12-month return on equity of 13.3% compared favorably with the industry’s 7.8%, reflecting the company’s efficiency in utilizing shareholders’ funds.

Key Drivers of FAF StockFirst American remains well positioned for long-term growth as demand for title insurance and settlement services continues across residential and commercial markets. While residential activity remains subdued, strong commercial demand is offsetting weakness. In the second quarter of 2026, commercial revenues rose 34% year over year to $314 million, while revenues per order increased 31% to $19,980.

First American's large-scale, strong agent network, proprietary title data and established brand create barriers to entry and support its competitive position. Its technology investments also benefit from this extensive data and established workflows. The company has further growth potential through agent banking, with First American Trust serving 310 title agents in the second quarter of 2026, up 37% year over year compared to a market of around 20,000 agents.

The company is deploying AI across its operations through platforms such as Endpoint, SEQUOIA, Exam Assist QC and ServiceMac, which are reducing manual work and improving customer service. Automation rates continue to rise, with Endpoint reaching 39% in July 2026, while SEQUOIA’s refinance automation increased to 40%. The company plans broader U.S. expansion through 2027, supporting lower costs, margin improvement and long-term earnings growth.

Higher investment income continues to support earnings growth. The company is benefiting from rising deposit balances, including commercial escrow, 1031 exchange and agent banking deposits, while optimizing its investment portfolio toward higher-yielding securities.

As of June 30, 2026, First American maintains strong financial flexibility, with $2.6 billion in cash, $10.7 billion in investments and $5.6 billion in equity. Free cash flow rose 32% year over year to $285 million in the first half. Strong liquidity supports strategic acquisitions, dividends and share repurchases. Its dividend yield and payout ratio are better than the industry average, making it an attractive pick for yield-seeking investors.

Risks for FAFElevated mortgage rates, affordability challenges and low housing inventory continue to pressure home purchase activity and title insurance revenues.

FAF's strong dependence on commercial title insurance also remains a risk. A slowdown in commercial real estate transactions could weigh on FAF's revenue growth and earnings.

ConclusionStrength in commercial business, rising investment income, continued investments in technology and disciplined capital deployment should favor FAF’s results. However, a weak residential housing market and dependence on commercial title are headwinds.

FAF’s VGM Score of A instils confidence. Given attractive valuation, solid growth projections, optimistic analyst sentiment and higher ROE, it is wise to retain this Zacks Rank #3 (Hold) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

First American Title policy-issuing agents may evaluate CryptEscrow's crypto-to-cash conversion services for eligible real estate transactions First American Title policy-issuing agents may evaluate CryptEscrow's crypto-to-cash conversion services for eligible real estate transactions

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Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.

Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.

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VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

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That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: First American Financial (FAF - Free Report) Headquartered in Santa Ana, CA, First American Financial Corporation, through its subsidiaries, provides title insurance, settlement services and other financial services and risk solutions to homeowners and lenders. Its revenues are reported under the title insurance and services segment and the home warranty segment.

FAF is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Finance stock. FAF has a Momentum Style Score of A, and shares are up 10.9% over the past four weeks.

Three analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.21 to $7.02 per share. FAF also boasts an average earnings surprise of +23.6%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, FAF should be on investors' short list.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

It also includes access to the Zacks Style Scores.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: First American Financial (FAF - Free Report) Headquartered in Santa Ana, CA, First American Financial Corporation, through its subsidiaries, provides title insurance, settlement services and other financial services and risk solutions to homeowners and lenders. Its revenues are reported under the title insurance and services segment and the home warranty segment.

FAF is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

It also boasts a Value Style Score of A thanks to attractive valuation metrics like a forward P/E ratio of 10.87; value investors should take notice.

For fiscal 2026, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.11 to $6.91 per share. FAF boasts an average earnings surprise of +23.6%.

With a solid Zacks Rank and top-tier Value and VGM Style Scores, FAF should be on investors' short list.

Posted by Defense World Staff on Jul 24th, 2026

Bank of New York Mellon Corp grew its position in shares of First American Financial Corporation (NYSE:FAF – Free Report) by 2.9% in the 1st quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The fund owned 899,197 shares of the insurance provider’s stock after acquiring an additional 25,671 shares during the period. Bank of New York Mellon Corp owned about 0.88% of First American Financial worth $54,213,000 as of its most recent SEC filing.

A number of other institutional investors also recently modified their holdings of FAF. Northwestern Mutual Wealth Management Co. increased its holdings in First American Financial by 4,485,375.2% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 5,786,263 shares of the insurance provider’s stock valued at $355,508,000 after purchasing an additional 5,786,134 shares during the period. Norges Bank purchased a new stake in First American Financial in the 4th quarter worth approximately $75,011,000. Manning & Napier Advisors LLC purchased a new stake in First American Financial in the 4th quarter worth approximately $63,693,000. Boston Partners grew its position in shares of First American Financial by 8.9% in the 3rd quarter. Boston Partners now owns 6,133,594 shares of the insurance provider’s stock worth $393,690,000 after buying an additional 500,649 shares during the last quarter. Finally, AQR Capital Management LLC grew its position in shares of First American Financial by 88.0% in the 4th quarter. AQR Capital Management LLC now owns 1,037,854 shares of the insurance provider’s stock worth $63,766,000 after buying an additional 485,731 shares during the last quarter. 89.05% of the stock is currently owned by hedge funds and other institutional investors.

Insider Activity In related news, SVP Lisa W. Cornehl sold 5,823 shares of First American Financial stock in a transaction dated Tuesday, May 5th. The shares were sold at an average price of $68.63, for a total transaction of $399,632.49. Following the completion of the transaction, the senior vice president directly owned 29,635 shares of the company’s stock, valued at $2,033,850.05. This trade represents a 16.42% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. 3.50% of the stock is currently owned by insiders.

Key First American Financial News Here are the key news stories impacting First American Financial this week:

Positive Sentiment: FAF beat second-quarter expectations, reporting $2.08 in EPS versus the $1.80 consensus and revenue of $2.11 billion versus $2.03 billion expected, helped by commercial title strength, higher investment income, and better average revenue per order. Article Title Positive Sentiment: Benchmark Co. initiated coverage with a Buy rating and an $85 price target, implying meaningful upside from recent trading levels. Article Title Neutral Sentiment: Several transcript and earnings-snapshot articles from Benzinga, Seeking Alpha, and other outlets mainly repeat the same strong quarterly results and conference call details, reinforcing the upbeat but not materially new narrative. Article Title Neutral Sentiment: Zacks Research nudged some future EPS estimates higher for 2027 and 2028, but cut its Q1 2027 forecast, leaving the longer-term outlook mixed while maintaining a Hold rating. Article Title Analyst Ratings Changes A number of equities analysts recently commented on FAF shares. Barclays upped their target price on First American Financial from $80.00 to $83.00 and gave the company an “overweight” rating in a report on Tuesday, July 7th. Zacks Research cut shares of First American Financial from a “strong-buy” rating to a “hold” rating in a report on Tuesday, June 23rd. Truist Financial boosted their price objective on shares of First American Financial from $82.00 to $85.00 and gave the company a “buy” rating in a research report on Friday, April 24th. Weiss Ratings restated a “buy (b)” rating on shares of First American Financial in a report on Monday. Finally, Wall Street Zen cut shares of First American Financial from a “buy” rating to a “hold” rating in a research report on Saturday, May 2nd. Seven equities research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus price target of $84.20.

Get Our Latest Stock Report on FAF

First American Financial Stock Performance Shares of NYSE:FAF opened at $69.08 on Friday. First American Financial Corporation has a 52-week low of $56.20 and a 52-week high of $73.50. The firm has a market capitalization of $7.04 billion, a P/E ratio of 9.57, a P/E/G ratio of 0.69 and a beta of 1.23. The stock has a 50 day moving average price of $68.22 and a 200-day moving average price of $65.91.

First American Financial (NYSE:FAF – Get Free Report) last released its quarterly earnings results on Wednesday, July 22nd. The insurance provider reported $2.08 earnings per share for the quarter, beating the consensus estimate of $1.80 by $0.28. The company had revenue of $2.11 billion for the quarter, compared to analyst estimates of $2.03 billion. First American Financial had a return on equity of 13.43% and a net margin of 9.33%.The firm’s revenue was up 15.0% on a year-over-year basis. During the same period in the previous year, the company posted $1.53 earnings per share. On average, equities analysts forecast that First American Financial Corporation will post 6.74 EPS for the current fiscal year.

First American Financial Dividend Announcement The firm also recently declared a quarterly dividend, which was paid on Monday, June 15th. Investors of record on Monday, June 8th were paid a $0.55 dividend. This represents a $2.20 annualized dividend and a dividend yield of 3.2%. The ex-dividend date was Monday, June 8th. First American Financial’s dividend payout ratio (DPR) is presently 33.79%.

First American Financial Profile (Free Report)

First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals.

The company’s title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions.

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First American Financial NYSE: FAF reported stronger second-quarter earnings as growth in commercial title activity, higher investment income tied to deposit growth and continued investment in artificial intelligence initiatives helped offset sluggish residential purchase demand.

On the company’s second-quarter 2026 earnings call, Chief Executive Officer Mark Seaton said First American generated adjusted earnings per share of $2.08, up 36% from the prior year. Chief Financial Officer Matt Wajner said GAAP earnings were $2.12 per diluted share, while adjusted earnings excluded net investment gains and purchase-related intangible amortization.

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“Our earnings momentum continued in the second quarter,” Seaton said, highlighting commercial as a “standout performer.”

Commercial Title Revenue Sets Second-Quarter Record Commercial revenue increased 34% from the year-ago period to $314 million, according to Wajner. The gain was driven by a 31% increase in average revenue per order, which reached $19,980 per transaction, a record for the company’s commercial business.

Seaton said commercial revenue set a second-quarter record, with the company closing 14 transactions that generated more than $1 million in premium, compared with 11 such transactions a year earlier. Within First American’s National Commercial Services division, Seaton said demand remained broad-based, with 10 of 11 asset classes growing year-over-year.

During the question-and-answer portion of the call, Seaton said industrial represented 23% of commercial premium, followed by multifamily at 16%, development sites at 14% and retail at 14%. He added that development site revenue was up 33% from last year, multifamily rose 23% and retail increased 59%. Data center revenue rose 147%, but Seaton emphasized that commercial growth was not limited to that category.

“We’re seeing broad-based growth,” Seaton said. “It’s not like we’re just doing a few data centers that are driving our revenue.”

Seaton said First American’s commercial pipeline “has never been stronger,” noting that the company had already closed three transactions generating more than $1 million in premium during July and that commercial open orders were up 9% over the first three weeks of the month.

Residential Purchase Market Remains Soft Residential purchase revenue increased 2% during the quarter, with Wajner citing a 6% increase in average revenue per order that was partially offset by a 3% decline in closed orders. He said the decline in closed purchase orders reflected continued weakness in home sale activity.

Seaton said affordability challenges continued to weigh on existing home sales. Through the first three weeks of July, open purchase orders were flat compared with last year, and he said the company remained “more cautious than the broader consensus” on the residential purchase market.

Refinance revenue rose 18% year-over-year, supported by a brief decline in mortgage rates earlier in the year. Wajner said refinance closed orders increased 12%, while average revenue per order rose 5%. However, both executives noted that refinance activity has moderated as mortgage rates moved higher again. Wajner said refinance accounted for just 5% of direct revenue during the quarter, underscoring how challenged the market remains relative to historical levels.

First American Trust Drives Deposit and Investment Income Growth Seaton identified First American Trust as one of the company’s most important earnings drivers, calling it a growing source of investment income. Average deposits at the bank totaled $7.9 billion in the quarter, up 30% from last year. Seaton said 36% of deposits came from sources outside the company’s captive title operations.

ServiceMac, First American’s mortgage sub-servicer, was the largest contributor to non-title deposits, accounting for $1.7 billion, up 76% from last year. Seaton said ServiceMac’s loan portfolio grew 54% during the quarter and that deposits should increase as the portfolio expands.

The company’s 1031 exchange banking solution also contributed to deposit growth. Seaton said average deposits from that business were $827 million in the second quarter, representing about one-third of total 1031 balances, less than a year after the solution launched. He also said 310 title agents now bank with First American Trust, up 37% from last year.

Wajner said investment income was $164 million in the second quarter, up 11% from the year-ago period, driven primarily by growth in the investment portfolio tied to higher deposits. Interest expense increased 33% to $30 million because of higher deposit balances at First American Trust. In response to an analyst question, Wajner said investment income net of interest expense grew 8% year-over-year and said that figure was a “good proxy” for growth in the second half of the year.

AI Initiatives Remain a Strategic Focus Seaton said First American’s primary strategic priority remains using artificial intelligence across the company to improve productivity, customer service and operating capabilities. He cited several examples, including a project to update 1,300 forms that historically required a lengthy manual process. Seaton said new AI tools reduced the time required by 97%.

The company also launched Exam Assist QC, an AI-enabled quality control workflow that has processed more than 50,000 orders, with 92% requiring no additional human review. At ServiceMac, Seaton said a virtual agent for loan transfer inquiries improved self-service success from 0% in April to 42% in June, with plans to expand from one self-service use case to seven by year-end.

Seaton also updated investors on Endpoint and Sequoia, two platforms tied to First American’s efforts to reimagine title and settlement processes. Endpoint, which uses agentic AI to automate routine escrow tasks, remains on track to scale across the company’s local title branch network by the end of 2027. First American converted its first title office in Spokane, Washington, during the quarter and plans a statewide rollout in Washington by year-end before a broader national deployment in 2027.

Sequoia, the company’s AI-powered title decisioning platform, expanded refinance capabilities into a centralized lender division in Southern California and broadened California refinance coverage from eight counties to 41. Seaton said the refinance automation rate improved from 35% to 40% during the quarter. For purchase transactions, Sequoia currently provides instant title decisioning for about 16% of purchase orders at opening in certain counties, with management seeing longer-term potential to automate about 70% of purchase title decisions and 80% of refinance decisions in markets where First American maintains title plants.

Margins, Cash Flow and Capital Allocation In the title segment, adjusted total revenue was $2 billion, up 14% from the same quarter of 2025. Wajner said agency revenue was $820 million, up 14%, while information and other revenue rose 12% to $295 million, driven by ServiceMac revenue growth, higher demand for non-insured information products and services, and refinance activity in Canadian operations.

Personnel costs rose 9% to $572 million, mainly due to incentive compensation tied to improved financial performance and higher salary expense. Other operating expenses increased 15% to $319 million, primarily reflecting higher production expenses from higher volumes and increased software expense. The title segment’s pretax margin was 15.7%, or 14.0% on an adjusted basis.

The home warranty segment reported adjusted total revenue of $112 million, up 1%. Its loss ratio improved to 40% from 41% a year earlier, as lower claim frequency was partially offset by higher claim severity. Adjusted pretax margin in the segment was 20.2%.

Seaton said free cash flow totaled $285 million in the first six months of the year, up 32% from last year, driven by improving operating cash flow and an 18% decline in capital expenditures. He said First American’s top capital allocation priority remains investing in technology, platforms and products, followed by acquisitions with strong strategic synergies and returning capital through dividends and opportunistic share repurchases.

During the quarter, First American repurchased 330,000 shares for $20 million at an average price of $61.99, Wajner said. Seaton said the company is not currently in the market repurchasing shares but continues to evaluate buybacks opportunistically. He added that the company expects to continue increasing its dividend over time.

About First American Financial (NYSE:FAF)First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals.

The company's title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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First American Financial (FAF - Free Report) came out with quarterly earnings of $2.08 per share, beating the Zacks Consensus Estimate of $1.8 per share. This compares to earnings of $1.53 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +15.56%. A quarter ago, it was expected that this financial services company would post earnings of $1.06 per share when it actually produced earnings of $1.33, delivering a surprise of +25.47%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

First American Financial, which belongs to the Zacks Insurance - Property and Casualty industry, posted revenues of $2.12 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 4.43%. This compares to year-ago revenues of $1.84 billion. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

First American Financial shares have added about 16.6% since the beginning of the year versus the S&P 500's gain of 9.7%.

What's Next for First American Financial?While First American Financial has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for First American Financial was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.75 on $2.01 billion in revenues for the coming quarter and $6.74 on $7.88 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Property and Casualty is currently in the bottom 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

United Fire Group (UFCS - Free Report) , another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 3.

This property and casualty insurance company is expected to post quarterly earnings of $0.72 per share in its upcoming report, which represents a year-over-year change of -20%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

United Fire Group's revenues are expected to be $378.9 million, up 13% from the year-ago quarter.

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? First American Financial (FAF - Free Report) , which belongs to the Zacks Insurance - Property and Casualty industry, could be a great candidate to consider.

This financial services company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 29.51%.

For the last reported quarter, First American Financial came out with earnings of $1.33 per share versus the Zacks Consensus Estimate of $1.06 per share, representing a surprise of 25.47%. For the previous quarter, the company was expected to post earnings of $1.49 per share and it actually produced earnings of $1.99 per share, delivering a surprise of 33.56%.

Thanks in part to this history, there has been a favorable change in earnings estimates for First American Financial lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.

Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

First American Financial has an Earnings ESP of +0.17% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on July 22, 2026.

Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.

Many companies end up beating the consensus EPS estimate, but that may not be the sole basis for their stocks moving higher. On the other hand, some stocks may hold their ground even if they end up missing the consensus estimate.

Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Based in Santa Ana, First American Financial (FAF - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 14.35%. Currently paying a dividend of $0.55 per share, the company has a dividend yield of 3.13%. In comparison, the Insurance - Property and Casualty industry's yield is 0.77%, while the S&P 500's yield is 1.36%.

Looking at dividend growth, the company's current annualized dividend of $2.20 is up 0.9% from last year. Over the last 5 years, First American Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.78%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First American Financial's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, FAF expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $6.75 per share, with earnings expected to increase 11.57% from the year ago period.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FAF is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

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—Earnings release dates for remainder of 2026—

SANTA ANA, Calif.--(BUSINESS WIRE)--First American Financial Corporation (NYSE: FAF), a premier provider of title, settlement and risk solutions for real estate transactions and the leader in the digital transformation of its industry, today announced that it will host a conference call to discuss its second-quarter 2026 earnings results on Thursday, July 23, 2026, at 11 a.m. EDT.

The call will follow the release of the company’s earnings results for the second quarter of 2026, which is scheduled for Wednesday, July 22, 2026, after the close of regular trading.

The conference call is open to investors, members of the financial community, the media and other members of the public. It can be accessed online at http://www.firstam.com/investor or by dialing toll free 877-407-8293. Callers from outside the United States may dial +1 201-689-8349.

An audio replay of the conference call will be available through August 6, 2026 by dialing 201-612-7415 and using the conference ID 13761705. An audio archive of the call and a copy of the second-quarter 2026 earnings release, including the financial information contained therein, will also be available on First American’s investor website.

At the present time, the company expects to issue a news release announcing its third-quarter financial results after the close of regular trading on Wednesday, Oct. 21, 2026 and host a conference call at 11 a.m. EDT on Thursday, Oct. 22, 2026.

About First American

First American Financial Corporation (NYSE: FAF) is a premier provider of title, settlement, and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 135 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.5 billion in 2025, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2026, First American was named one of the 100 Best Companies to Work For by Great Place to Work® and Fortune Magazine for the eleventh consecutive year. More information about the company can be found at www.firstam.com.

More News From First American Financial Corporation

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SANTA ANA, Calif.--(BUSINESS WIRE)--First American Title Insurance Company, a leading provider of title insurance and settlement services and the largest subsidiary of First American Financial Corporation (NYSE: FAF), today announced that Pam Forrester, senior vice president of Lender Division operations, was honored as one of HousingWire’s 2026 Women of Influence. HousingWire's editorial selection committee selects Women of Influence winners based on their professional achievements within their organizations and contributions to the industry, community outreach, client impact and personal success.

“Pam's leadership has helped shape the future of mortgage technology, while creating lasting value for our customers, our team, and our industry. She has an exceptional ability to turn bold ideas into meaningful results."

Share “Pam's leadership has helped shape the future of mortgage technology, while creating lasting value for our customers, our team, and our industry,” said Todd McGowan, Ph.D., president of First American’s Lender Division. “She has an exceptional ability to turn bold ideas into meaningful results, all while investing in the growth of those around her. This recognition is a well-deserved reflection of the impact she has made throughout her career.”

Forrester has earned a reputation as a visionary leader whose influence extends well beyond her organization to the broader mortgage industry. Through more than 30 years of innovation, operational excellence, and servant leadership, she has transformed how lenders and servicers manage critical document and servicing processes, while actively developing future leaders and championing opportunities for women across the organization.

“The Women of Influence award recognizes leaders whose decisions, expertise and vision have a meaningful impact on the housing industry,” said Clayton Collins, CEO of HousingWire. “This year's honorees are leading organizations, business lines and strategic initiatives that influence how housing professionals serve consumers, operate their businesses and respond to changing market conditions. They also represent the depth of talent and leadership women continue to bring to every corner of the housing economy. Their contributions continue to strengthen and advance the industry.”

About First American Title Insurance Company

First American Title Insurance Company, the largest subsidiary of First American Financial Corporation (NYSE: FAF), traces its history to 1889. One of the largest title insurers in the nation, the company offers title services through its direct operations and an extensive network of agents throughout the United States and abroad. First American Title provides comprehensive title insurance coverage and professional services for real estate purchases, construction, refinances and equity loans. For more information, visit www.firstam.com/title.

About First American

First American Financial Corporation (NYSE: FAF) is a premier provider of title, settlement and risk solutions for real estate transactions. With its combination of financial strength and stability built over more than 135 years, innovative proprietary technologies, and unmatched data assets, the company is leading the digital transformation of its industry. First American also provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $7.5 billion in 2025, the company offers its products and services directly and through its agents throughout the United States and abroad. In 2026, First American was named one of the 100 Best Companies to Work For by Great Place to Work® and Fortune Magazine for the eleventh consecutive year. More information about the company can be found at www.firstam.com.

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

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What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.

Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: First American Financial (FAF - Free Report) Headquartered in Santa Ana, CA., First American Financial serves homebuyers and sellers, real estate professionals, loan originators and servicers, commercial property professionals, homebuilders and others involved in residential and commercial property transactions with products and services specific to their needs. The company was founded in the state of Delaware in January 2008. On Jun 1, 2010, the company’s common stock was listed on the New York Stock Exchange.

FAF is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. FAF has a Growth Style Score of B, forecasting year-over-year earnings growth of 12.6% for the current fiscal year.

One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.09 to $6.81 per share. FAF boasts an average earnings surprise of +22%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, FAF should be on investors' short list.

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

First American Financial (FAF - Free Report) is headquartered in Santa Ana, and is in the Finance sector. The stock has seen a price change of 13.02% since the start of the year. The financial services company is currently shelling out a dividend of $0.55 per share, with a dividend yield of 3.17%. This compares to the Insurance - Property and Casualty industry's yield of 0.82% and the S&P 500's yield of 1.44%.

Looking at dividend growth, the company's current annualized dividend of $2.20 is up 0.9% from last year. Over the last 5 years, First American Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.78%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First American Financial's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.

FAF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $6.81 per share, with earnings expected to increase 12.56% from the year ago period.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FAF is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.

Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.

Zacks Premium also includes the Zacks Style Scores.

What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: First American Financial (FAF - Free Report) Headquartered in Santa Ana, CA., First American Financial serves homebuyers and sellers, real estate professionals, loan originators and servicers, commercial property professionals, homebuilders and others involved in residential and commercial property transactions with products and services specific to their needs. The company was founded in the state of Delaware in January 2008. On Jun 1, 2010, the company’s common stock was listed on the New York Stock Exchange.

FAF is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.

Momentum investors should take note of this Finance stock. FAF has a Momentum Style Score of B, and shares are up 1.9% over the past four weeks.

For fiscal 2026, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.09 to $6.81 per share. FAF boasts an average earnings surprise of +22%.

With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, FAF should be on investors' short list.

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Headquartered in Santa Ana, First American Financial (FAF - Free Report) is a Finance stock that has seen a price change of 10.42% so far this year. Currently paying a dividend of $0.55 per share, the company has a dividend yield of 3.24%. In comparison, the Insurance - Property and Casualty industry's yield is 0.78%, while the S&P 500's yield is 1.42%.

Looking at dividend growth, the company's current annualized dividend of $2.20 is up 0.9% from last year. Over the last 5 years, First American Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 3.78%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First American Financial's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.

FAF is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $6.83 per share, representing a year-over-year earnings growth rate of 12.89%.

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that FAF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is First American Financial (FAF - Free Report) . FAF is currently sporting a Zacks Rank #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.43 right now. For comparison, its industry sports an average P/E of 26.12. FAF's Forward P/E has been as high as 15.32 and as low as 9.75, with a median of 11.61, all within the past year.

Another valuation metric that we should highlight is FAF's P/B ratio of 1.31. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.38. Within the past 52 weeks, FAF's P/B has been as high as 1.43 and as low as 1.08, with a median of 1.29.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. FAF has a P/S ratio of 0.9. This compares to its industry's average P/S of 1.2.

Value investors will likely look at more than just these metrics, but the above data helps show that First American Financial is likely undervalued currently. And when considering the strength of its earnings outlook, FAF sticks out as one of the market's strongest value stocks.