AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - NYSE:AFG - US0259321042 - Common Stock
130.94 USD
+0.37 (+0.28%)
130.94 USD
0 (0%)
Overall AFG gets a fundamental rating of 5 out of 10. We evaluated AFG against 147 industry peers in the Insurance industry. While AFG has a great health rating, its profitability is only average at the moment. AFG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year AFG was profitable.
In the past year AFG had a positive cash flow from operations.
AFG had positive earnings in each of the past 5 years.
In the past 5 years AFG always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 2.49%, AFG perfoms like the industry average, outperforming 55.78% of the companies in the same industry.
Looking at the Return On Equity, with a value of 16.92%, AFG is in the better half of the industry, outperforming 78.23% of the companies in the same industry.
AFG's Return On Invested Capital of 2.56% is in line compared to the rest of the industry. AFG outperforms 50.34% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AFG is in line with the industry average of 4.46%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.49% | ||
| ROE | 16.92% | ||
| ROIC | 2.56% |
ROA(3y)2.95%
ROA(5y)3.35%
ROE(3y)20.68%
ROE(5y)22.52%
ROIC(3y)2.95%
ROIC(5y)2.64%
1.3 Margins
With a decent Profit Margin value of 9.23%, AFG is doing good in the industry, outperforming 62.59% of the companies in the same industry.
AFG's Profit Margin has been stable in the last couple of years.
AFG has a Operating Margin (11.89%) which is in line with its industry peers.
AFG's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11.89% | ||
| PM (TTM) | 9.23% | ||
| GM | N/A |
OM growth 3Y-15.95%
OM growth 5Y-2.25%
PM growth 3Y-29.55%
PM growth 5Y-0.39%
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.
AFG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, AFG has less shares outstanding
The debt/assets ratio for AFG has been reduced compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.79, we must say that AFG is in the distress zone and has some risk of bankruptcy.
AFG has a better Altman-Z score (0.79) than 76.87% of its industry peers.
AFG has a debt to FCF ratio of 0.95. This is a very positive value and a sign of high solvency as it would only need 0.95 years to pay back of all of its debts.
AFG has a better Debt to FCF ratio (0.95) than 68.03% of its industry peers.
A Debt/Equity ratio of 0.33 indicates that AFG is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.33, AFG is in line with its industry, outperforming 44.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 0.95 | ||
| Altman-Z | 0.79 |
ROIC/WACC0.32
WACC8.08%
2.3 Liquidity
A Current Ratio of 3.88 indicates that AFG has no problem at all paying its short term obligations.
AFG has a Current ratio of 3.88. This is amongst the best in the industry. AFG outperforms 95.92% of its industry peers.
AFG has a Quick Ratio of 3.88. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
AFG has a Quick ratio of 3.88. This is amongst the best in the industry. AFG outperforms 95.92% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.88 | ||
| Quick Ratio | 3.88 |
3. Growth
3.1 Past
The earnings per share for AFG have decreased strongly by -11.59% in the last year.
AFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
AFG shows a small growth in Revenue. In the last year, the Revenue has grown by 2.96%.
AFG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.16% yearly.
EPS 1Y (TTM)-11.59%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%-16.41%
Revenue 1Y (TTM)2.96%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%3.91%
3.2 Future
AFG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.60% yearly.
Based on estimates for the next years, AFG will show a small growth in Revenue. The Revenue will grow by 3.14% on average per year.
EPS Next Y-11.23%
EPS Next 2Y4.37%
EPS Next 3Y4.6%
EPS Next 5YN/A
Revenue Next Year0.75%
Revenue Next 2Y3.94%
Revenue Next 3Y3.14%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AFG is valuated correctly with a Price/Earnings ratio of 13.96.
Compared to the rest of the industry, the Price/Earnings ratio of AFG is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.77, AFG is valued a bit cheaper.
With a Price/Forward Earnings ratio of 11.18, the valuation of AFG can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AFG is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.23, AFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.96 | ||
| Fwd PE | 11.18 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AFG is on the same level as its industry peers.
AFG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AFG is cheaper than 63.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.06 | ||
| EV/EBITDA | 10.37 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.08
EPS Next 2Y4.37%
EPS Next 3Y4.6%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 2.68%.
Compared to an average industry Dividend Yield of 3.31, AFG pays a bit more dividend than its industry peers.
AFG's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
5.2 History
The dividend of AFG is nicely growing with an annual growth rate of 13.64%!
AFG has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of AFG decreased recently.
Dividend Growth(5Y)13.64%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
AFG pays out 99.74% 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.
DP99.74%
EPS Next 2Y4.37%
EPS Next 3Y4.6%
130.94
+0.37 (+0.28%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners67.24%
Inst Owner Change0%
Ins Owners17.97%
Ins Owner Change1.15%
Market Cap10.92B
Analysts72
Price Target135.25 (3.29%)
Short Float %2.51%
Short Ratio3.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.68% |
Yearly Dividend9.4
Dividend Growth(5Y)13.64%
DP99.74%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-4.97%
Min EPS beat(2)-11.61%
Max EPS beat(2)1.66%
EPS beat(4)1
Avg EPS beat(4)-4.43%
Min EPS beat(4)-11.61%
Max EPS beat(4)1.66%
EPS beat(8)3
Avg EPS beat(8)-2.24%
EPS beat(12)5
Avg EPS beat(12)-2.2%
EPS beat(16)9
Avg EPS beat(16)6.98%
Revenue beat(2)0
Avg Revenue beat(2)-8.98%
Min Revenue beat(2)-10.18%
Max Revenue beat(2)-7.78%
Revenue beat(4)2
Avg Revenue beat(4)0.13%
Min Revenue beat(4)-10.18%
Max Revenue beat(4)11.93%
Revenue beat(8)4
Avg Revenue beat(8)-0.49%
Revenue beat(12)6
Avg Revenue beat(12)2.78%
Revenue beat(16)10
Avg Revenue beat(16)6.28%
PT rev (1m)0%
PT rev (3m)0.61%
EPS NQ rev (1m)9.9%
EPS NQ rev (3m)-15.55%
EPS NY rev (1m)0.44%
EPS NY rev (3m)-5.99%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.96 | ||
| Fwd PE | 11.18 | ||
| P/S | 1.32 | ||
| P/FCF | 7.06 | ||
| P/OCF | 6.55 | ||
| P/B | 2.42 | ||
| P/tB | 2.72 | ||
| EV/EBITDA | 10.37 |
EPS(TTM)9.38
EY7.16%
EPS(NY)11.71
Fwd EY8.94%
FCF(TTM)18.54
FCFY14.16%
OCF(TTM)19.98
OCFY15.26%
SpS99.26
BVpS54.16
TBVpS48.18
PEG (NY)N/A
PEG (5Y)3.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.49% | ||
| ROE | 16.92% | ||
| ROCE | 3.23% | ||
| ROIC | 2.56% | ||
| ROICexc | 2.67% | ||
| ROICexgc | 2.94% | ||
| OM | 11.89% | ||
| PM (TTM) | 9.23% | ||
| GM | N/A | ||
| FCFM | 18.68% |
ROA(3y)2.95%
ROA(5y)3.35%
ROE(3y)20.68%
ROE(5y)22.52%
ROIC(3y)2.95%
ROIC(5y)2.64%
ROICexc(3y)3.07%
ROICexc(5y)2.78%
ROICexgc(3y)3.35%
ROICexgc(5y)3.01%
ROCE(3y)3.73%
ROCE(5y)3.34%
ROICexcg growth 3Y-11.18%
ROICexcg growth 5Y16.37%
ROICexc growth 3Y-11.66%
ROICexc growth 5Y15.82%
OM growth 3Y-15.95%
OM growth 5Y-2.25%
PM growth 3Y-29.55%
PM growth 5Y-0.39%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 0.95 | ||
| Debt/EBITDA | 1.38 | ||
| Cap/Depr | 139.54% | ||
| Cap/Sales | 1.45% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 155.7% | ||
| Profit Quality | 202.36% | ||
| Current Ratio | 3.88 | ||
| Quick Ratio | 3.88 | ||
| Altman-Z | 0.79 |
F-Score7
WACC8.08%
ROIC/WACC0.32
Cap/Depr(3y)114.17%
Cap/Depr(5y)79.15%
Cap/Sales(3y)1.25%
Cap/Sales(5y)1.15%
Profit Quality(3y)152.16%
Profit Quality(5y)165.86%
High Growth Momentum
Growth
EPS 1Y (TTM)-11.59%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%-16.41%
EPS Next Y-11.23%
EPS Next 2Y4.37%
EPS Next 3Y4.6%
EPS Next 5YN/A
Revenue 1Y (TTM)2.96%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%3.91%
Revenue Next Year0.75%
Revenue Next 2Y3.94%
Revenue Next 3Y3.14%
Revenue Next 5YN/A
EBIT growth 1Y-11.03%
EBIT growth 3Y-8.95%
EBIT growth 5Y-2.09%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y41.06%
FCF growth 3Y-14.88%
FCF growth 5Y-15.83%
OCF growth 1Y43.99%
OCF growth 3Y-12.4%
OCF growth 5Y-14.05%