Fidelity National Financial Inc.
's (
FNF
) second quarter 2012 earnings surpassed the Zacks Consensus
Estimate by 12.8%. This represents the third-straight quarter with
a positive earnings surprise for this title insurance underwriter.
With a price-to-book (P/B) ratio of just 1, this Zacks #1 Rank
(Strong Buy) is a true value pick.
Strong Second Quarter Performance
On July 23, Fidelity National Financial delivered second quarter
2012 earnings of 53 cents per share, up 47.2% from the year-ago
quarter. It was also 12.8% higher than the Zacks Consensus Estimate
of 47 cents.
Total revenue increased 41.5% year over year to $1.7 billion. The
improvement came on the back of higher title revenue (up 16% year
over year) and contributions from the newly consolidated restaurant
group.
Total expenses climbed 34.6% over the prior-year quarter, primarily
due to increased personnel costs, operating expenses and other
acquisition costs.
On July 30, the company's board approved a share buyback program,
wherein the company can repurchase 15 million shares over three
years.
On June 25, Fidelity National Financial announced the acquisition
of J. Alexander's Corporation (
JAX
). Subsequently, it will be integrated with American Blue Ribbon
Holdings, Inc., the restaurant operating subsidiary of Fidelity
National. The purchase consideration is valued at $78 million.
Positive Estimate Revisions
Over the last 30 days, the Zacks Consensus Estimate for 2012 rose
19.1% to $1.81 as all four estimates were revised upward. This also
represents a year-over-year increase of 8.9%.
For 2013, three of four estimates moved upward in the same time
frame, eventually lifting the Zacks Consensus Estimate by 7.5% to
$1.44.
Attractive Valuation
Along with a P/B of 1.0, Fidelity National has a price-to-earnings
(P/E) ratio of 10.2. (A P/B ratio under 3.0 and P/E ratio below
15.0 indicate value.)
Moreover, the company has 1-year return on equity (ROE) of 11.5%,
higher than its peer group average of 7.1%.
Headquartered in Jacksonville, Florida, Fidelity National Financial
offers title insurance, mortgage services and restaurant and other
diversified services in the United States.
With a market capitalization of $4.08 billion and 18,000 employees,
it competes with First American Financial Corporation (
FAF
), Old Republic International Corp. (
ORI
) and Stewart Information Services Corporation (
STC
), among others.
FIDELITY NAT FI (FNF): Free Stock Analysis
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