What is Chubb Forward Rate of Return (Yacktman) %?
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Chubb's forward rate of return for was 15.34%.
The historical rank and industry rank for Chubb's Forward Rate of Return (Yacktman) % or its related term are showing as below:
BUE:CB'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 7.7 Med: 14.6 Max: 64.6
Current: 14.84
During the past 13 years, Chubb's highest Forward Rate of Return was 64.60. The lowest was 7.70. And the median was 14.60.
BUE:CB's Forward Rate of Return (Yacktman) % is not ranked
in the Insurance industry.
Industry Median: 16.07
vs BUE:CB: 14.84
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Chubb Forward Rate of Return (Yacktman) % Historical Data
The historical data trend for Chubb's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Chubb's Forward Rate of Return (Yacktman) %
For the Insurance - Property & Casualty subindustry, Chubb's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Chubb's Forward Rate of Return (Yacktman) % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Chubb's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Chubb's Forward Rate of Return (Yacktman) % falls into.
Chubb Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Chubb (BUE:CB) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Chubb Forward Rate of Return (Yacktman) % Related Terms
Thank you for viewing the detailed overview of Chubb's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Chubb Corp was incorporated as a business corporation under the laws of the State of New Jersey in June 1967. It is a holding company for several, separately organized, property and casualty insurance companies referred to informally as the Chubb Group of Insurance Companies (the P&C Group). Since 1882, insurance companies or predecessor companies included in the P&C Group have provided property and casualty insurance to businesses and individuals around the world. The P&C Group consists of subsidiaries domiciled both in and outside the United States. The P&C Group operates through three strategic business units: Chubb Personal Insurance, Chubb Commercial Insurance and Chubb Specialty Insurance. Chubb Personal Insurance offers personal insurance products for homes and valuable articles (such as art and jewelry), for high net worth individuals. Chubb Commercial Insurance offers commercial insurance products. Its underwriting focuses on specific industry segments and niches. Much of its commercial customer base is comprised of mid-sized commercial entities. Its insurance offerings include multiple peril, primary liability, excess and umbrella liability, automobile, workers' compensation and property and marine. The market for Chubb Commercial Insurance products is the United States. The markets for its commercial products outside the United States are Europe, Canada and Australia. Chubb Specialty Insurance offers specialized professional liability products for privately held and publicly traded companies, financial institutions, professional firms, healthcare and not-for-profit organizations. Chubb Specialty Insurance products include directors and officers liability insurance, errors and omissions liability insurance, employment practices liability insurance, fiduciary liability insurance and commercial and financial fidelity insurance. The market for these products is the United States. Outside the United States, the markets for these products are Europe, Canada and Australia. Chubb Specialty Insurance also offers surety products, in the United States and Latin America. The Company competes not only with other stock companies but also with mutual companies, other underwriting organizations and alternative risk sharing mechanisms.
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