Why First American Financial (FAF) is a Top Dividend Stock for Your Portfolio

Company Overview - First American Financial (FAF) is based in Santa Ana and operates in the Finance sector, with a year-to-date share price change of 3.72% [3] - The company currently pays a dividend of $0.54 per share, resulting in a dividend yield of 3.34%, significantly higher than the Insurance - Property and Casualty industry's yield of 0.66% and the S&P 500's yield of 1.65% [3] Dividend Performance - The current annualized dividend of $2.16 represents a 0.9% increase from the previous year [4] - Over the past five years, FAF has increased its dividend five times, achieving an average annual increase of 4.66% [4] - The company's payout ratio stands at 49%, indicating that it distributes 49% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year, FAF anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 projected at $5.25 per share, reflecting a year-over-year growth rate of 19.32% [5] Investment Considerations - Dividends are favored by investors for various reasons, including improving stock investing profits and providing tax advantages [6] - While tech start-ups and high-growth businesses rarely offer dividends, larger companies with established profits typically do [7] - FAF is positioned as a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]