Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Has Fidelity National Financial Inc (FNF) Become the Perfect Stock?

Page 1 of 2

Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?

Fidelity National Financial IncOne thing’s for sure: You’ll never discover truly great investments unless you actively look for them. Let’s discuss the ideal qualities of a perfect stock and then decide whether Fidelity National Financial Inc (NYSE:FNF) fits the bill.

The quest for perfection
Stocks that look great based on one factor may prove horrible elsewhere, making due diligence a crucial part of your investing research. The best stocks excel in many different areas, including these important factors:

  • Growth. Expanding businesses show healthy revenue growth. While past growth is no guarantee that revenue will keep rising, it’s certainly a better sign than a stagnant top line.
  • Margins. Higher sales mean nothing if a company can’t produce profits from them. Strong margins ensure that company can turn revenue into profit.
  • Balance sheet. At debt-laden companies, banks and bondholders compete with shareholders for management’s attention. Companies with strong balance sheets don’t have to worry about the distraction of debt.
  • Moneymaking opportunities. Return on equity helps measure how well a company is finding opportunities to turn its resources into profitable business endeavors.
  • Valuation. You can’t afford to pay too much for even the best companies. By using normalized figures, you can see how a stock’s simple earnings multiple fits into a longer-term context.
  • Dividends. For tangible proof of profits, a check to shareholders every three months can’t be beat. Companies with solid dividends and strong commitments to increasing payouts treat shareholders well.

With those factors in mind, let’s take a closer look at Fidelity National Financial.

Factor What We Want to See Actual Pass or Fail?
Growth 5-year annual revenue growth > 15% 5.7% Fail
1-year revenue growth > 12% 48.8% Pass
Margins Gross margin > 35% 58.3% Pass
Net margin > 15% 8.4% Fail
Balance sheet Debt to equity < 50% 28.3% Pass
Current ratio > 1.3 2.97 Pass
Opportunities Return on equity > 15% 14.4% Fail
Valuation Normalized P/E < 20 10.62 Pass
Dividends Current yield > 2% 2.6% Pass
5-year dividend growth > 10% (13.5%) Fail
Total score 6 out of 10

Source: S&P Capital IQ. Total score = number of passes.

Since we looked at Fidelity National Financial last year, the company has picked up a point, as its revenue climbed sharply compared with last year’s contraction. The stock has jumped 45% over the past year as a reawakening in the housing market helped boost its prospects.

Page 1 of 2

Biotech Insider Alert - $5 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!