Like many companies, Fidelity National Financial (NYSE:FNF) has been hammered by the market's recent selloff. The stock was down about 42% year to date through Friday's close. But if you look past the effects of the coronavirus crisis, you'll see a company that has a lot of business momentum on its side.

The stock price has rebounded about 23% off its recent lows on the stimulus package and the Federal Reserve's decision to lower interest rates to the 0% to 0.25% range, but the title insurance provider for the real estate and mortgage industries is a very solid long-term investment.

Banner year in 2019

Fidelity National is one of the largest title insurance providers in the nation. Through its title insurance underwriters -- Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title, and National Title of New York -- the company says it issues more title insurance policies than any other firm in the country.

Hand signing document with pen

Image source: Getty Images.

The company is coming off what it calls a "banner year." In the fourth quarter, the company reported $2.4 billion in revenue, up from $1.7 billion in the fourth quarter of 2018. Adjusted net earnings were $263 million, up from $175 million the previous year. The company beat earnings estimates with adjusted earnings per share of $0.95 in the quarter, up from $0.63 in the fourth quarter of 2018.

Another important metric for the company, its title margin -- earnings as a percentage of revenue -- was 16.3% in the fourth quarter, up from 14.2% in the fourth quarter of 2018. For the full year, the title margin was 16.3%. It's the company's best title margin since 2003 and is one of the best in the industry.

Investors noticed -- the stock gained 44% in 2019.

Diversifying into retirement business

While it is among the leaders in the title insurance space, Fidelity National moved to diversify its revenue stream by acquiring FGL Holdings on Feb. 7. FGL Holdings, through its subsidiary F&G Life and Insurance, provides annuities and life insurance for approximately 700,000 customers.

"Importantly, we expect F&G to reduce the risk and volatility inherent in our title operations by providing a counterbalance to FNF's earnings sensitivity to mortgage interest rates, while offering significant and immediate earnings accretion," FNF Chairman William Foley said on the fourth-quarter earnings call. "Ideally -- additionally, we are excited with F&G's very attractive growth outlook as the retirement and insurance business is benefiting from an aging demographic and accommodative government policy, which are driving robust demand for their products." 

FNF officials believe that getting into the retirement business will allow the company to perform better in a variety of economic environments, including those that are challenging for title insurance. FGL generated $217 million in net income in the fourth quarter, up from a net income loss of $156 million in the fourth quarter of 2018. Net income for the full year 2019 was $476 million, up from a net loss of $16 million in 2018.

Good long-term potential

The coronavirus crisis has thrown pretty much all outlooks for 2020 out of whack, as few expected interest rates to drop to the zero bound or the housing market to slow so drastically.

While housing sales have slowed, refinancing is on the rise, with requests to refinance growing at the highest rate since 2009 as mortgage rates have fallen to near-record lows. That may help FNF stem the market slow down until the real estate market picks up again post-crisis. In the meantime, FNF has been very diligent about managing expenses and will get an earnings boost when the FGL acquisition closes in the second or third quarter. Long-term, this is a good company at a great value -- trading for less than 7 times earnings -- that will be able to weather the storm and provide good long-term returns for investors.