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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. First American Financial's forward rate of return for was -0.03%.
The historical rank and industry rank for First American Financial's Forward Rate of Return (Yacktman) % or its related term are showing as below:
FAF'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -10.41 Med: 19.16 Max: 36
Current: -0.51
During the past 13 years, First American Financial's highest Forward Rate of Return was 36.00. The lowest was -10.41. And the median was 19.16.
FAF's Forward Rate of Return (Yacktman) % is ranked worse than 83.87% of 279
companies
in the Insurance industry
Industry Median: 16.53
vs FAF: -0.51
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.
First American Financial (NYSE:FAF) 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.
First American Financial Forward Rate of Return (Yacktman) % Related Terms
First American Financial Forward Rate of Return (Yacktman) % Historical Data
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The historical data trend for First American Financial'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.
First American Financial Forward Rate of Return (Yacktman) % Chart
FAF vs AXS, ACT, MTG: Forward Rate of Return (Yacktman) % Comparison
For the Insurance - Specialty subindustry, First American Financial'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.
First American Financial Forward Rate of Return (Yacktman) % vs Insurance Industry
For the Insurance industry and Financial Services sector, First American Financial's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where First American Financial's Forward Rate of Return (Yacktman) % falls into.
First American Financial 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.
What does a Forward Rate of Return (Yacktman) % of -0.03% mean?
First American Financial (FAF) has a Forward Rate of Return (Yacktman) % of -0.03% as of Jun. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on First American Financial and its competitors. According to the industry distribution chart, First American Financial ranks #234 out of 279 companies in the Insurance industry, placing it in the top 83.9%.
Is First American Financial's Forward Rate of Return (Yacktman) % too high?
First American Financial's current Forward Rate of Return (Yacktman) % is -0.03%. Based on the distribution chart, First American Financial ranks #234 out of 279 companies in the Insurance industry, which is in the bottom quartile relative to peers. Overall, First American Financial has a GF Score™ of 76/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does First American Financial's Forward Rate of Return (Yacktman) % compare to AXS and ACT?
According to the Insurance industry distribution chart, First American Financial ranks #234 out of 279 companies for Forward Rate of Return (Yacktman) %. This places First American Financial in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 16.53. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for an Insurance company?
The median Forward Rate of Return (Yacktman) % among Insurance companies is 16.53, based on 279 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on First American Financial and its competitors. For the Insurance industry, the median Forward Rate of Return (Yacktman) % is 16.53 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. First American Financial's current Forward Rate of Return (Yacktman) % is -0.03%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is First American Financial stock overvalued right now?
Based on GuruFocus' analysis, First American Financial (FAF) is currently considered Fairly Valued. The stock's GF Value™ is $71.89, compared to a current price of $72.75 — trading 1.2% above its estimated fair value. The current Forward Rate of Return (Yacktman) % is -0.03%. First American Financial's overall GF Score™ is 76/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For First American Financial (FAF), the current Forward Rate of Return (Yacktman) % is -0.03% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is First American Financial (FAF) Overvalued in 2026?
Based on GuruFocus' analysis, First American Financial stock appears to be overvalued.
The current stock price of $72.75 is trading 1.2% above its estimated GF Value™ of $71.89.
GuruFocus considers First American Financial to be Fairly Valued.
Key valuation signals for FAF:
Forward Rate of Return (Yacktman) %: -0.03%
GF Value™: $71.89 vs. price of $72.75 (1.2% above fair value)
No single metric tells the full story. See the FAF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
First American Financial Corp is engaged in the business of providing title insurance, settlement services, and other financial services and risk solutions. The group's reportable segments are: Title insurance and services, Home warranty, and Corporate. Maximum revenue is generated from the Title insurance and services segment, which provides title insurance, closing, escrow, and related services domestically and internationally in connection with residential and commercial real estate transactions. This segment also provides solutions to mitigate risk and facilitate real estate transactions, along with offering banking, trust, warehouse lending, mortgage subservicing and wealth management services. The majority of the group's revenue is generated from escrow fees and insurance premiums.
76GF Score
Get the complete analysis for FAF
Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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