In October 2021, the insurer acquired ServiceMac to support the mortgage industry and expand product innovation efforts. Increased mortgage financing availability has a positive effect on residential real estate activity, which typically boosts the top line of the title insurer. The majority of First American's business is dependent on activity in the real estate and mortgage markets. The insurer continues to make significant investments in technology across its major businesses to enhance customer experience through digital solutions. Higher operating revenues in the home warranty business and higher net realized investment gains in both the home warranty and property and casualty businesses should drive the Specialty Insurance business.įirst American has a robust acquisition pipeline and focuses on strategic initiatives to strengthen its product offerings and focus on its core business.
The Title Insurance and Services business is expected to gain momentum from improved agent premiums, higher direct premiums and escrow fees, increased domestic residential purchase and commercial transactions. It has an impressive Value Score of A, which reflects the attractive valuation of the stock. ROE reflects its efficiency in using its shareholders’ funds. It compares favorably with the industry average of 5.6%. The company’s trailing 12-month return on equity (ROE) of 17.2% reflects its growth potential. Image Source: Zacks Investment Research Return on Equity (ROE)
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