Morningstar

Fairfax Financial Holdings Ltd Shs Subord.Vtg FFH

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Stock XTSE Rating as of
CAD 1,745.81 +16.65 (0.96%)
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As of Delayed Price Closed

Company Report

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Higher Interest Rates Are Boosting Fairfax

Brett Horn

While its primary business is insurance, Fairfax is in some ways more of an investment fund. Chairman and CEO Prem Watsa has a long history of bold investment bets and has shown a willingness to be unorthodox when it comes to portfolio construction. As a result, compared with other insurers, the company's results tend to be driven more by results on the investment side. We're somewhat skeptical of this approach, as we believe disciplined underwriting is a more reliable path to long-term value creation for insurers, and Fairfax's underwriting record is relatively poor.

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Price vs Fair Value

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FFH is trading at a 43% premium.
Price
CAD 1,745.81
Fair Value
CAD 5,971.00
Uncertainty
Medium
1-Star Price
CAD 9,464.00
5-Star Price
CAD 963.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Fairfax's large gains during the financial crisis highlight the massive returns Watsa's unorthodox investing style is capable of generating.

Bears

Fairfax will continue to post poor results and could destroy significant value if Watsa's investment thesis doesn't pan out.

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News

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Trading Information

Previous Close Price
CAD 1,729.16
Day Range
CAD 1,736.74–1,757.09
52-Week Range
CAD 1,070.00–1,757.09
Bid/Ask
CAD 1,670.00 / CAD 1,850.00
Market Cap
CAD 43.40 Bil
Volume/Avg
28,944 / 35,655

Key Statistics

Price/Earnings (Normalized)
8.37
Price/Sales
1.16
Dividend Yield (Trailing)
1.16%
Dividend Yield (Forward)
1.16%
Total Yield
5.22%

Company Profile

Fairfax provides reinsurance and property and casualty insurance in Canada, the United States, and other international markets. The company also has some noninsurance operations such as restaurants. Fairfax has been led by Prem Watsa, its chairman and CEO, since its formation in 1985.
Sector
Financial Services
Industry
Insurance - Property & Casualty
Stock Style Box
Large Value
Total Number of Employees
51,044
Website
https://www.fairfax.ca

Competitors

Valuation

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Metric
FFH
TRV
WRB
Price/Earnings (Normalized)
 8.3714.6214.82
Price/Book Value
 1.392.172.86
Price/Sales
 1.161.241.85
Price/Cash Flow
 58.544.9116.03
Price/Earnings
FFH
TRV
WRB

Financial Strength

Metric
FFH
TRV
WRB
Quick Ratio
 ———
Current Ratio
 ———
Interest Coverage
 10.9812.5216.59
Quick Ratio
No chart available

Profitability

Metric
FFH
TRV
WRB
Return on Assets (Normalized)
 4.90%3.02%4.31%
Return on Equity (Normalized)
 21.44%16.15%21.73%
Return on Invested Capital (Normalized)
 13.17%13.04%16.59%
Return on Assets
FFH
TRV
WRB

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