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First American FinancialFRA:Y1F -1.65%76 Return-on-Tangible-Equity is 26.52% as of Jun. 2026, which is 1% above its 10-year median of 26.16. GuruFocus rates FRA:Y1F with a GF Score™ of 76/100 and a GF Value™ of €61.30 (Fairly Valued). The stock has 7 warning signs investors should review. Among 499 Insurance companies, First American Financial ranks better than 69.74% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. First American Financial's annualized net income for the quarter that ended in Jun. 2026 was €759 Mil. First American Financial's average shareholder tangible equity for the quarter that ended in Jun. 2026 was €2,861 Mil. Therefore, First American Financial's annualized Return-on-Tangible-Equity for the quarter that ended in Jun. 2026 was 26.52%.
The historical rank and industry rank for First American Financial's Return-on-Tangible-Equity or its related term are showing as below:
FRA:Y1F'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 5.78 Med: 26.16 Max: 40.52
Current: 21.52
During the past 13 years, First American Financial's highest Return-on-Tangible-Equity was 40.52%. The lowest was 5.78%. And the median was 26.16%.
FRA:Y1F's Return-on-Tangible-Equity is ranked better than 69.74% of 499
companies
in the Insurance industry
Industry Median: 13.51
vs FRA:Y1F: 21.52
First American Financial (FRA:Y1F) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
First American Financial Return-on-Tangible-Equity Related Terms
First American Financial Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for First American Financial's Return-on-Tangible-Equity 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 Return-on-Tangible-Equity Chart
FRA:Y1F vs ACT, ESNT, MTG: Return-on-Tangible-Equity Comparison
For the Insurance - Specialty subindustry, First American Financial's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Insurance Industry
For the Insurance industry and Financial Services sector, First American Financial's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where First American Financial's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Jun. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 26.52% mean?
First American Financial (FRA:Y1F) has a Return-on-Tangible-Equity of 26.52% as of Jun. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on First American Financial and its competitors. This is near median its historical median of 26.16. Over the past decade, First American Financial's Return-on-Tangible-Equity has ranged from 5.78 to 40.52. According to the industry distribution chart, First American Financial ranks #151 out of 499 companies in the Insurance industry, placing it in the top 30.3%.
Is First American Financial's Return-on-Tangible-Equity too high?
First American Financial's current Return-on-Tangible-Equity of 26.52% is near median its 10-year median of 26.16. Over the past 10 years, this metric has ranged from a low of 5.78 to a high of 40.52. The Insurance industry median Return-on-Tangible-Equity is 13.51. First American Financial's value of 26.52% is 96.3% above this industry median. Based on the distribution chart, First American Financial ranks #151 out of 499 companies in the Insurance industry, which is above the industry midpoint. 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 Return-on-Tangible-Equity compare to ACT and ESNT?
According to the Insurance industry distribution chart, First American Financial ranks #151 out of 499 companies for Return-on-Tangible-Equity. This puts First American Financial in the upper half of its industry. The industry median Return-on-Tangible-Equity is 13.51. First American Financial's value of 26.52% is 96.3% above this benchmark. Historically, First American Financial's own Return-on-Tangible-Equity has ranged from 5.78 to 40.52 over the past decade. While the company's 10-year median is 26.16 vs. the industry median of 13.51, First American Financial has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for an Insurance company?
The median Return-on-Tangible-Equity among Insurance companies is 13.51, based on 499 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. First American Financial's current Return-on-Tangible-Equity of 26.52% is 96.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on First American Financial and its competitors. For the Insurance industry, the median Return-on-Tangible-Equity is 13.51 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. First American Financial's current Return-on-Tangible-Equity is 26.52%, which is near median its own 10-year median of 26.16. 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 (FRA:Y1F) is currently considered Fairly Valued. The stock's GF Value™ is €61.30, compared to a current price of €59.50 — trading 2.9% below its estimated fair value. The current Return-on-Tangible-Equity is 26.52%, which is near median its 10-year median of 26.16 and 96.3% above the Insurance industry median of 13.51. 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 Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For First American Financial (FRA:Y1F), the current Return-on-Tangible-Equity is 26.52% 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 (FRA:Y1F) Overvalued in 2026?
Based on GuruFocus' analysis, First American Financial stock appears to be undervalued.
The current stock price of €59.50 is trading 2.9% below its estimated GF Value™ of €61.30.
GuruFocus considers First American Financial to be Fairly Valued.
Key valuation signals for FRA:Y1F:
Return-on-Tangible-Equity: 26.52% (near median its 10-year median of 26.16)
GF Value™: €61.30 vs. price of €59.50 (2.9% below fair value)
Industry Position: 96.3% above the Insurance median (#151 of 499)
No single metric tells the full story. See the FRA:Y1F 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
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