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Alleghany (Alleghany) Forward Rate of Return (Yacktman) % : 28.82% (As of Jun. 2022)


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What is Alleghany Forward Rate of Return (Yacktman) %?

Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Alleghany's forward rate of return for was 28.82%.

The historical rank and industry rank for Alleghany's Forward Rate of Return (Yacktman) % or its related term are showing as below:

Y' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -18.63   Med: 11.19   Max: 30.05
Current: 28.67

During the past 13 years, Alleghany's highest Forward Rate of Return was 30.05. The lowest was -18.63. And the median was 11.19.

Y's Forward Rate of Return (Yacktman) % is not ranked
in the Insurance industry.
Industry Median: 15.73 vs Y: 28.67

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.


Alleghany Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Alleghany'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.

* Premium members only.

Alleghany Forward Rate of Return (Yacktman) % Chart

Alleghany Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Forward Rate of Return (Yacktman) %
Get a 7-Day Free Trial Premium Member Only Premium Member Only -10.81 -18.46 -10.54 -10.96 25.43

Alleghany Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Forward Rate of Return (Yacktman) % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.32 15.31 25.43 27.57 28.82

Competitive Comparison of Alleghany's Forward Rate of Return (Yacktman) %

For the Insurance - Property & Casualty subindustry, Alleghany'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.


Alleghany's Forward Rate of Return (Yacktman) % Distribution in the Insurance Industry

For the Insurance industry and Financial Services sector, Alleghany's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Alleghany's Forward Rate of Return (Yacktman) % falls into.



Alleghany 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).

Alleghany's Forward Rate of Return of Jun. 2022 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=73.46438095/833.1+0.2
=28.82 %

* 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.


Alleghany  (NYSE:Y) 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.


Alleghany Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Alleghany's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


Alleghany (Alleghany) Business Description

Industry
Traded in Other Exchanges
N/A
Address
1411 Broadway, 34th Floor, New York, NY, USA, 10018
Alleghany Corp is a property and casualty insurance company that owns and manages subsidiaries that operate reinsurance and insurance operations. The company also executes certain private capital investments. The company classifies its business into three reportable segments: reinsurance, insurance, and Alleghany Capital. These segments' underwriting activities are evaluated separately from investment and corporate activities. Reinsurance contracts are generally classified as a treaty or facultative contracts. Treaty reinsurance provides for the automatic reinsuring of all or a portion of a specified class of risk underwritten by the ceding company. Facultative reinsurance is geared toward individual risks.
Executives
Christopher Kent Dalrymple officer: VP and General Counsel C/O DARWIN PROFESSIONAL UNDERWRITERS INC 9 FARM SPRINGS ROAD FARMINGTON CT 06032
Ian H Chippendale director TRANSATLANTIC HOLDINGS, INC. 80 PINE ST NEW YORK NY 10005
Joseph Patrick Brandon officer: Executive Vice President C/O ALLEGHANY CORPORATION 1411 BROADWAY, 34TH FLOOR NEW YORK NY 10018
Chris H Cheesman director C/O ALLEGHANY CORPORATION 1411 BROADWAY, 34TH FLOOR NEW YORK NY 10018
Kerry J Jacobs officer: SVP, Chief Financial Officer C/O ALLEGHANY CORPORATION 1411 BROADWAY, 34TH FLOOR NEW YORK NY 10018
William K Lavin director 375 PARK AVENUE SUITE 3201 NEW YORK NY 10152
John F Shannon officer: SVP, chief investment officer C/O ALLEGHANY CORPORATION 1411 BROADWAY, 34TH FLOOR NEW YORK NY 10018
Phillip M Martineau director 414 EAST THIRD STREET PO BOX 1109 MUSCATINE IA 52761
Lauren M Tyler director C/O ALLEGHANY CORPORATION, 1411 BROADWAY, 34TH FLOOR, NEW YORK NY 10018
Jefferson Kirby director ALLEGHANY CORPORATION 7 TIMES SQUARE TOWER, 17TH FLOOR NEW YORK NY 10036
Rex D Adams director
Raymond Wong director C/O SPRING MOUNTAIN CAPITAL, LP 650 MADISON AVENUE, 20TH FLOOR NEW YORK NY 10022
James F Will director ST VINCENT COLLEGE, 300 PRASER PURCHASE RD, LATROBE PA 15650
Roger Bryce Gorham officer: SVP, Chief Financial Officer C/O ALLEGHANY CORPORATION 1411 BROADWAY, 34TH FLOOR NEW YORK NY 10018
Sennott John Langton Jr officer: SVP C/O ALLEGHANY CORPORATION 1411 BROADWAY, 34TH FLOOR NEW YORK NY 10018

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