Fairfax Financial Is Near Record Highs

Fairfax Financial Holdings (TSX:FFH) isn’t just a market winner — it’s a long-term wealth compounder. Despite trading close to its all-time highs, this stock still offers meaningful upside, thanks to consistent execution, diversified growth engines, and financial strength. Here’s why it deserves a place on your radar — or in your portfolio.

A Proven Market-Beater

Fairfax has outperformed the broader market by a wide margin over the past decade. With annualized returns of 17.3%, a $10,000 investment in the company 10 years ago would be worth $49,290 today. In comparison, the TSX 60 (via iShares ETF) delivered 11.7% annually, turning that same investment into $30,280.

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The last five years have been even more impressive. Fairfax posted a 47% compound annual return, transforming a $10,000 investment in 2020 into roughly $69,600 — more than three times the market’s return in the same period.

Multiple Growth Drivers in Play

Fairfax’s core P&C insurance business continues to deliver strong underwriting profits. In the first half of 2025, the company reported:

Net premiums written of US$14.1 billion (up 6.8% YoY)
Net insurance revenue of US$12.6 billion (up 4.3% YoY)

But Fairfax’s success isn’t limited to insurance. Its investment portfolio is thriving in today’s interest rate environment, generating US$1.1 billion in interest and dividend income over six months — up 4.6% year over year.

The company’s value-driven capital allocation strategy is also a key advantage. Fairfax invests with discipline and patience, as seen in its recent acquisition of a 33% stake in French insurer Albingia — a move that supports its global expansion.

Book value per share, a key measure of intrinsic value, has increased 150% over the past five years, further confirming its ability to create shareholder value.

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Financially Strong With More Upside

Fairfax is backed by a rock-solid balance sheet:

A- credit rating (S&P)
Over US$3.0 billion in cash and marketable securities
Another US$1.9 billion invested in associates and non-insurance businesses

At a current share price of around $2,400, the stock may seem expensive, but analysts see its fair value closer to $2,669 — implying 11% upside from current levels.

Bottom Line: Still a Buy — Especially on Dips

Fairfax has already delivered outstanding returns, but this isn’t a case of “you missed it.” The company’s consistent growth, prudent management, strong financials, and global reach continue to make it a compelling investment — even near its highs.

Long-term investors may consider initiating a position now, especially in tax-advantaged accounts like a TFSA or RRSP for maximum compounding benefit. And if the market pulls back? That could be a perfect chance to buy more at a discount.

Fairfax isn’t just one of the top-performing Canadian stocks — it’s one of the most reliable, well-managed businesses in the market today.