FAF Boosts Shareholders' Value Via Dividend Hike, Shares Rise

Core Insights - First American Financial Corporation (FAF) announced a 2% increase in its quarterly cash dividend to 55 cents per share, reflecting its strong financial position and commitment to shareholders [1][2][9] - The new dividend yield is 3.2%, significantly higher than the industry average of 0.2%, making FAF an attractive option for yield-seeking investors [3][9] - FAF has a solid track record of dividend increases, with a nine-year compound annual growth rate (CAGR) of 5.5% [3][9] Financial Strength and Capital Management - FAF is committed to returning excess cash to shareholders through both dividend increases and share repurchases, with a new repurchase plan authorizing up to $300 million [4][5] - As of June 30, 2025, FAF had $114.2 million in cash and cash equivalents, along with $900 million available on its revolving credit facility, indicating strong liquidity [6][9] - The return on equity for FAF was 10.4%, outperforming the industry average of 7.6%, which supports its ability to sustain dividend payments [7] Market Performance - FAF shares have gained 9% year-to-date, outperforming the industry growth of 7.5%, indicating positive market momentum [8] - The company's strategy of enhancing growth and capital position is expected to help maintain this momentum [8]