Loews Corporation (L) versus First American Corporation (The) (FAF) Head-To-Head Contrast

First American Corporation (The) (NYSE: FAF) and Loews Corporation (NYSE:L) are both mid-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitabiliy, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings and price targets for First American Corporation (The) and Loews Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First American Corporation (The) 0 2 0 0 2.00
Loews Corporation 1 1 0 0 1.50

First American Corporation (The) currently has a consensus target price of $42.00, indicating a potential downside of 7.45%. Loews Corporation has a consensus target price of $39.00, indicating a potential downside of 16.93%. Given First American Corporation (The)’s stronger consensus rating and higher probable upside, equities analysts clearly believe First American Corporation (The) is more favorable than Loews Corporation.

Valuation and Earnings

This table compares First American Corporation (The) and Loews Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First American Corporation (The) $5.69 billion 0.88 $634.07 million $3.13 14.50
Loews Corporation $13.23 billion 1.19 $3.26 billion $2.44 19.24

Loews Corporation has higher revenue and earnings than First American Corporation (The). First American Corporation (The) is trading at a lower price-to-earnings ratio than Loews Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First American Corporation (The) and Loews Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First American Corporation (The) 6.13% 12.20% 4.11%
Loews Corporation 6.23% 4.67% 1.40%

Risk and Volatility

First American Corporation (The) has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Loews Corporation has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Institutional & Insider Ownership

85.0% of First American Corporation (The) shares are owned by institutional investors. Comparatively, 58.6% of Loews Corporation shares are owned by institutional investors. 3.1% of First American Corporation (The) shares are owned by company insiders. Comparatively, 11.8% of Loews Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

First American Corporation (The) pays an annual dividend of $1.36 per share and has a dividend yield of 3.0%. Loews Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. First American Corporation (The) pays out 43.5% of its earnings in the form of a dividend. Loews Corporation pays out 10.2% 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. Loews Corporation has raised its dividend for 5 consecutive years.

First American Corporation (The) Company Profile

First American Financial Corporation, through its subsidiaries, is engaged in the business of providing financial services. The Company operates through the title insurance and services segment, and specialty insurance segment. The title insurance and services segment provides title insurance, closing and/or escrow services and similar or related services domestically and internationally in connection with residential and commercial real estate transactions. The title insurance and services segment also provides products, services and solutions involving the use of property related data, including data derived from its database, which are designed to manage risk or otherwise facilitate real estate transactions. The specialty insurance segment issues property and casualty insurance policies and sells home warranty products to residential homeowners and renters for liability losses and typical hazards, such as fire, theft, vandalism and other types of property damage.

Loews Corporation Company Profile

Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.

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