AMERICAN FINANCIAL GROUP INC (AFG)
US0259321042 - Common Stock
We assign a fundamental rating of 5 out of 10 to AFG. AFG was compared to 141 industry peers in the Insurance industry. AFG has an excellent financial health rating, but there are some minor concerns on its profitability. AFG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
AFG had positive earnings in the past year.
In the past year AFG had a positive cash flow from operations.
Each year in the past 5 years AFG has been profitable.
AFG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AFG has a Return On Assets of 2.98%. This is in the better half of the industry: AFG outperforms 65.47% of its industry peers.
AFG's Return On Equity of 20.32% is amongst the best of the industry. AFG outperforms 81.30% of its industry peers.
With a decent Return On Invested Capital value of 2.97%, AFG is doing good in the industry, outperforming 62.59% of the companies in the same industry.
AFG had an Average Return On Invested Capital over the past 3 years of 3.35%. This is in line with the industry average of 4.02%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.98% | ||
| ROE | 20.32% | ||
| ROIC | 2.97% |
ROA(3y)4.29%
ROA(5y)3.03%
ROE(3y)27.33%
ROE(5y)21.41%
ROIC(3y)3.35%
ROIC(5y)2.37%
1.3 Margins
The Profit Margin of AFG (11.08%) is better than 67.63% of its industry peers.
AFG's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 13.76%, AFG is in line with its industry, outperforming 59.71% of the companies in the same industry.
AFG's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.76% | ||
| PM (TTM) | 11.08% | ||
| GM | N/A |
OM growth 3Y21.72%
OM growth 5Y5.39%
PM growth 3Y-5.04%
PM growth 5Y8.05%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), AFG is destroying value.
The number of shares outstanding for AFG has been reduced compared to 1 year ago.
The number of shares outstanding for AFG has been reduced compared to 5 years ago.
The debt/assets ratio for AFG has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.83, we must say that AFG is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AFG (0.83) is better than 80.58% of its industry peers.
The Debt to FCF ratio of AFG is 1.08, which is an excellent value as it means it would take AFG, only 1.08 years of fcf income to pay off all of its debts.
AFG's Debt to FCF ratio of 1.08 is fine compared to the rest of the industry. AFG outperforms 64.03% of its industry peers.
AFG has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
AFG has a Debt to Equity ratio (0.34) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 1.08 | ||
| Altman-Z | 0.83 |
ROIC/WACC0.37
WACC8.13%
2.3 Liquidity
AFG has a Current Ratio of 3.34. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
AFG's Current ratio of 3.34 is amongst the best of the industry. AFG outperforms 95.68% of its industry peers.
A Quick Ratio of 3.34 indicates that AFG has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 3.34, AFG belongs to the top of the industry, outperforming 95.68% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.34 | ||
| Quick Ratio | 3.34 |
3. Growth
3.1 Past
AFG shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.05%.
Measured over the past 5 years, AFG shows a small growth in Earnings Per Share. The EPS has been growing by 4.68% on average per year.
AFG shows a small growth in Revenue. In the last year, the Revenue has grown by 7.16%.
Measured over the past years, AFG shows a small growth in Revenue. The Revenue has been growing by 1.77% on average per year.
EPS 1Y (TTM)1.05%
EPS 3Y7.63%
EPS 5Y4.68%
EPS Q2Q%7.56%
Revenue 1Y (TTM)7.16%
Revenue growth 3Y10.77%
Revenue growth 5Y1.77%
Sales Q2Q%5.18%
3.2 Future
The Earnings Per Share is expected to grow by 7.29% on average over the next years.
The Revenue is expected to grow by 6.28% on average over the next years.
EPS Next Y5.61%
EPS Next 2Y6.8%
EPS Next 3Y7.29%
EPS Next 5YN/A
Revenue Next Year5.55%
Revenue Next 2Y7.08%
Revenue Next 3Y6.28%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
AFG is valuated correctly with a Price/Earnings ratio of 12.79.
The rest of the industry has a similar Price/Earnings ratio as AFG.
The average S&P500 Price/Earnings ratio is at 30.97. AFG is valued rather cheaply when compared to this.
AFG is valuated reasonably with a Price/Forward Earnings ratio of 11.27.
AFG's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.29. AFG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.79 | ||
| Fwd PE | 11.27 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AFG indicates a somewhat cheap valuation: AFG is cheaper than 60.43% of the companies listed in the same industry.
AFG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.37 | ||
| EV/EBITDA | 9.92 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AFG may justify a higher PE ratio.
PEG (NY)2.28
PEG (5Y)2.73
EPS Next 2Y6.8%
EPS Next 3Y7.29%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.38%, AFG has a reasonable but not impressive dividend return.
AFG's Dividend Yield is a higher than the industry average which is at 5.21.
Compared to an average S&P500 Dividend Yield of 2.22, AFG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
5.2 History
On average, the dividend of AFG grows each year by 12.75%, which is quite nice.
AFG has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)12.75%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
AFG pays out 63.41% of its income as dividend. This is not a sustainable payout ratio.
AFG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP63.41%
EPS Next 2Y6.8%
EPS Next 3Y7.29%
AMERICAN FINANCIAL GROUP INC
NYSE:AFG (10/8/2024, 8:04:00 PM)
After market: 135.72 0 (0%)135.72
+0.65 (+0.48%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap11.39B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.38% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.79 | ||
| Fwd PE | 11.27 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.28
PEG (5Y)2.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.98% | ||
| ROE | 20.32% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 13.76% | ||
| PM (TTM) | 11.08% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.34 | ||
| Quick Ratio | 3.34 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)1.05%
EPS 3Y7.63%
EPS 5Y
EPS Q2Q%
EPS Next Y5.61%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.16%
Revenue growth 3Y10.77%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y