ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % 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 ROE %s can be extremely high.
* 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.
For the Insurance - Property & Casualty subindustry, Fairfax Financial Holdings's ROE %, along with its competitors' market caps and ROE % 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.
Fairfax Financial Holdings ROE % vs Insurance Industry
For the Insurance industry and Financial Services sector, Fairfax Financial Holdings's ROE % distribution charts can be found below:
* The bar in red indicates where Fairfax Financial Holdings's ROE % 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 ROE %, the net income of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
ROE % is displayed in the 30-year financial page.
Fairfax Financial Holdings (TSX:FFH) has a ROE % of 10.57% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Fairfax Financial Holdings and its competitors. This is 33% below median its historical median of 15.72. According to the industry distribution chart, Fairfax Financial Holdings ranks #149 out of 507 companies in the Insurance industry, placing it in the top 29.4%.
Is Fairfax Financial Holdings' ROE % too high?
Fairfax Financial Holdings' current ROE % of 10.57% is 33% below median its 10-year median of 15.72. The Insurance industry median ROE % is 11.69. Fairfax Financial Holdings' value of 10.57% is 9.6% below this industry median. Based on the distribution chart, Fairfax Financial Holdings ranks #149 out of 507 companies in the Insurance industry, which is above the industry midpoint. Overall, Fairfax Financial Holdings has a GF Score™ of 77/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Fairfax Financial Holdings' ROE % compare to CB and PGR?
According to the Insurance industry distribution chart, Fairfax Financial Holdings ranks #149 out of 507 companies for ROE %. This puts Fairfax Financial Holdings in the upper half of its industry. The industry median ROE % is 11.69. Fairfax Financial Holdings' value of 10.57% is 9.6% below this benchmark. While the company's 10-year median is 15.72 vs. the industry median of 11.69, Fairfax Financial Holdings has consistently been below 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 ROE % for an Insurance company?
The median ROE % among Insurance companies is 11.69, based on 507 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Fairfax Financial Holdings's current ROE % of 10.57% is 9.6% below 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Fairfax Financial Holdings and its competitors. For the Insurance industry, the median ROE % is 11.69 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Fairfax Financial Holdings's current ROE % is 10.57%, which is 33% below median its own 10-year median of 15.72. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Fairfax Financial Holdings stock overvalued right now?
Based on GuruFocus' analysis, Fairfax Financial Holdings (TSX:FFH) is currently considered Fairly Valued. The stock's GF Value™ is C$2,159.03, compared to a current price of C$2,347.02 — trading 8.7% above its estimated fair value. The current ROE % is 10.57%, which is 33% below median its 10-year median of 15.72 and 9.6% below the Insurance industry median of 11.69. Fairfax Financial Holdings' overall GF Score™ is 77/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROE % calculated?
ROE % is calculated from a company's financial statements. For Fairfax Financial Holdings (TSX:FFH), the current ROE % is 10.57% as of Mar. 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 Fairfax Financial Holdings (TSX:FFH) Overvalued in 2026?
Based on GuruFocus' analysis, Fairfax Financial Holdings stock appears to be overvalued.
The current stock price of C$2,347.02 is trading 8.7% above its estimated GF Value™ of C$2,159.03.
GuruFocus considers Fairfax Financial Holdings to be Fairly Valued.
Key valuation signals for TSX:FFH:
ROE %: 10.57% (33% below median its 10-year median of 15.72)
GF Value™: C$2,159.03 vs. price of C$2,347.02 (8.7% above fair value)
Industry Position: 9.6% below the Insurance median (#149 of 507)
No single metric tells the full story. See the TSX:FFH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Fairfax Financial Holdings 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 chair and CEO, since its formation in 1985.
77GF Score
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