FAF vs STC: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
FAF is the larger of the two ($7.66B market cap): the incumbent the market prices for continued execution (10.14x forward earnings, beta 1.25). STC is the smaller challenger ($2.06B), priced similarly on forward earnings (9.28x): more room to run, but more to prove. The real question is which set of drivers you believe, and whether owning one (or both) leaves you over-concentrated.
FAF vs STC: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | FAF | STC | What it tells you |
|---|---|---|---|
| Market cap | $7.66B | $2.06B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 10.14 | 9.28 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 10.40 | 14.79 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 1.25 | 1.00 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 79% of range | 49% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 1.36 | 1.24 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Before you buy: how FAF and STC affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. FAF and STC share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined FAF and STC exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does First American Financial Corporation (FAF) do?
First American Financial Corporation is one of the largest title insurance and settlement-services providers in the United States, holding roughly 23 percent of the title underwriter market and ranking with Fidelity National Financial at the top of a concentrated industry. Its core business issues title insurance policies that protect lenders and homebuyers against defects in property ownership, and it provides the escrow, closing, and settlement services that sit at the center of nearly every US real estate transaction. Beyond the title segment, First American runs a home warranty business, a data and analytics operation built on one of the industry's largest property databases, and a growing bank that holds customer deposits and escrow balances.
What does Stewart Information Services Corporation (STC) do?
Stewart Information Services Corporation (NYSE: STC), founded in 1893 and headquartered in Houston, Texas, is a real estate services company built around title insurance and closing and settlement services. It operates two main segments: a Title segment (residential and commercial title insurance and escrow) and a Real Estate Solutions segment (data, valuation, and mortgage services). Stewart held roughly 10.9% underwriter market share in 2025, making it the fifth-largest title insurance underwriter in a market dominated by First American, the Fidelity National/Chicago Title family, and Old Republic.
FAF vs STC: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- FAF drivers: Commercial and data-center strength; Investment income on float and deposits.
- STC drivers: Real estate transaction recovery; Real Estate Solutions diversification.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: First American's results are tightly tied to the real estate cycle, so a prolonged housing slowdown, high mortgage rates, or a commercial real estate downturn would cut transaction volumes and premiums. For STC, stewart's business is highly cyclical and depends on the health of the US real estate market.
FAF or STC: which should you pick?
Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick FAF if you believe its drivers more; STC if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the FAF and STC guides.
FAF vs STC: the full fundamentals
FAF. As of July 2026, First American trades at roughly 10 to 11 times trailing earnings, a modest multiple typical of cyclical financials, with a dividend yield near 3 percent and a payout ratio around a third of earnings. First-quarter 2026 revenue rose about 16 percent year over year to roughly $1.8 billion as record commercial activity offset soft residential purchase volumes, and the low multiple reflects the market pricing in real estate cyclicality and interest-rate sensitivity.
STC. STC trades around the high $60s per share with a P/E near 15, a mid-cap valuation reflecting its cyclical earnings. Q1 2026 marked a strong rebound (adjusted EPS of ~$0.78 versus ~$0.07 a year earlier) as title and real estate solutions revenue recovered. Reported earnings remain sensitive to the housing cycle, so trailing multiples can look distorted at cycle troughs and peaks.
Headline figures (approximate, July 2026): FAF shows revenue (ttm) ~$7B, q1 2026 revenue ~$1.8B, q1 2026 net income ~$125M ($1.21 diluted EPS), eps (trailing) ~$6.5; STC shows revenue (ttm) ~$2.9B, q1 2026 revenue ~$781M (up ~28% YoY), eps (ttm) ~$4.49, p/e (ttm) ~15x.
The bottom line: FAF vs STC
FAF and STC are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined FAF and STC exposure against your real portfolio. It is not an investment adviser.
Wondering how FAF or STC fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in First American Financial Corporation with AI
Connect the broker you already use and ask Walnut's AI how FAF fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between FAF and STC?
+
First American Financial Corporation is one of the largest title insurance and settlement-services providers in the United States, holding roughly 23 percent of the title underwriter market and ranking with Fidelity National Financial at the top of a concentrated industry. Stewart Information Services Corporation (NYSE: STC), founded in 1893 and headquartered in Houston, Texas, is a real estate services company built around title insurance and closing and settlement services. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is FAF or STC the better stock?
+
Neither is universally better. FAF is the larger incumbent; STC is the smaller challenger and looks cheaper on forward earnings. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, FAF or STC?
+
On forward P/E (as of August 2026), FAF trades at 10.14x and STC at 9.28x, so STC is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both FAF and STC?
+
Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of FAF vs STC?
+
FAF: First American's results are tightly tied to the real estate cycle, so a prolonged housing slowdown, high mortgage rates, or a commercial real estate downturn would cut transaction volumes and premiums. A large share of profit comes from investment income, so falling interest rates would pressure earnings even if volumes hold. The title business also carries claims risk from title defects, fraud, and litigation, and the company has faced cybersecurity and data-privacy scrutiny given the sensitive information it handles. Competition among the top underwriters is intense, regulation of title pricing varies by state, and any structural change to how title insurance is required or priced in US mortgages could disrupt the model. STC: Stewart's business is highly cyclical and depends on the health of the US real estate market. Prolonged periods of elevated mortgage rates (around 6 to 7% in 2026) suppress home sales and refinancing, which directly pressures title premium volume and earnings. The company is also the smaller player among the four dominant title families, so it competes against larger, better-capitalized rivals with more scale. Commercial real estate activity can be uneven and volatile quarter to quarter, and a broader economic slowdown would reduce both residential and commercial transaction volumes. Regulatory changes to title insurance pricing or the closing process could also weigh on the industry.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell FAF or STC; figures are approximate and dated (as of August 2026). Verify current data before investing.