Fidelity National Financial Inc – Best Insurance Stocks 2021
Financial stocks are back in focus as the bond yields begin to inch up. Cyclical sectors could also benefit as inflation seems to be on the rise. Energy stocks have been doing very well as coal, oil, and gas prices inch up. The real estate sector is also a cyclical one. Companies like Fidelity National Financial serve the real estate industry. If you have not heard of Fidelity national Financial then you should note that it is the largest title insurance company in the US. Half of the company’s revenue comes from premiums received by underwriting title insurance. If you want to buy insurance stocks, then companies in niche areas like title insurance could uncover interesting opportunities. The American Land Title Association estimates Fidelity National Financial’s market share in the American title insurance sector to be around 33%.
Fidelity National Financial Growth
Fidelity National Financial has grown significantly over the past decade. Its total revenue has gone up from $4.8 billion in 2011 to $10.7 billion in 2020. Net income has benefitted from operating leverage. It has gone up from $370 million in 2011 to $1.4 billion in 2020. The number of shares did go up significantly from 223 million in 2011 to 368 million in 2015. Since then, however, the share count has gone down to 286 million as of 2020. Fidelity National Financial has managed to generate significant amounts of free cash flow. Free cash flow is one of the most important metrics tracked by investors. Accounting profits can distort the health of a company. However, cash is king and free cash flows indicate the health of a company. Fidelity has grown its free cash flow from $89 million in 2011 to $1.4 billion in 2020. Judging by the growth and financial trends, Fidelity National Financial is among the best insurance stocks 2021.
Buy Insurance Stocks
Fidelity National Financial’s stock was trading at a healthy 3.5% dividend yield as of 1st October 2021. Even though the stock was down 5.7% on a 1-month basis, it was up 72% on a 5-year basis. The price trend shows a good amount of cyclicality.