Comparing Fidelity National Financial (FNF) & Stewart Information Services (STC)

Fidelity National Financial (NYSE: FNF) and Stewart Information Services (NYSE:STC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for Fidelity National Financial and Stewart Information Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fidelity National Financial 0 1 4 0 2.80
Stewart Information Services 0 1 0 0 2.00

Fidelity National Financial presently has a consensus price target of $43.80, indicating a potential upside of 14.81%. Stewart Information Services has a consensus price target of $46.00, indicating a potential upside of 8.08%. Given Fidelity National Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Fidelity National Financial is more favorable than Stewart Information Services.

Valuation and Earnings

This table compares Fidelity National Financial and Stewart Information Services’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fidelity National Financial $7.26 billion 1.44 $771.00 million $2.27 16.81
Stewart Information Services $1.96 billion 0.52 $48.65 million $2.17 19.61

Fidelity National Financial has higher revenue and earnings than Stewart Information Services. Fidelity National Financial is trading at a lower price-to-earnings ratio than Stewart Information Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fidelity National Financial and Stewart Information Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fidelity National Financial 8.66% 13.04% 6.46%
Stewart Information Services 2.09% 7.01% 3.40%

Institutional and Insider Ownership

84.0% of Fidelity National Financial shares are owned by institutional investors. Comparatively, 88.9% of Stewart Information Services shares are owned by institutional investors. 6.1% of Fidelity National Financial shares are owned by insiders. Comparatively, 2.3% of Stewart Information Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Fidelity National Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.1%. Stewart Information Services pays an annual dividend of $1.20 per share and has a dividend yield of 2.8%. Fidelity National Financial pays out 52.9% of its earnings in the form of a dividend. Stewart Information Services pays out 55.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Fidelity National Financial has raised its dividend for 6 consecutive years. Fidelity National Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Fidelity National Financial has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Summary

Fidelity National Financial beats Stewart Information Services on 14 of the 17 factors compared between the two stocks.

Fidelity National Financial Company Profile

Fidelity National Financial, Inc., together with its subsidiaries, provides title insurance, technology, and transaction services to the real estate and mortgage industries in the United States. The company operates in Title, and Corporate and Other segments. It offers title insurance, escrow, and other title related services, including collection and trust activities, trustee sales guarantees, recordings and conveyances, and home warranty insurance. The company also offers other title related services used in the production and management of mortgage loans. In addition, it engages in real estate brokerage business. Fidelity National Financial, Inc. was founded in 1847 and is headquartered in Jacksonville, Florida.

Stewart Information Services Company Profile

Stewart Information Services Corporation, through its subsidiaries, provides title insurance and real estate transaction services. The company operates in two segments, Title Insurance and Related Services, and Ancillary Services and Corporate. The Title Insurance and Related Services segment is involved in searching, examining, closing, and insuring the condition of the title to real property. This segment also offers centralized title services, including title and closing, post-closing, default, and REO-related title services; home and personal insurance services; and services for tax-deferred exchanges. The Ancillary Services and Corporate segment primarily provides search, appraisal, and valuation services to the mortgage industry. The company serves homebuyers and sellers, residential and commercial real estate professionals, mortgage lenders and servicers, title agencies and real estate attorneys, home builders, and mortgage brokers and investors. It operates in the United States, Canada, the United Kingdom, Australia, Central Europe, and internationally. Stewart Information Services Corporation was founded in 1893 and is headquartered in Houston, Texas.

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