AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - NYSE:AFG - US0259321042 - Common Stock
138.89 USD
-3.55 (-2.49%)
138.89 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to AFG. AFG was compared to 147 industry peers in the Insurance industry. AFG is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. AFG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
AFG had positive earnings in the past year.
AFG had a positive operating cash flow in the past year.
In the past 5 years AFG has always been profitable.
AFG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of AFG (2.36%) is comparable to the rest of the industry.
AFG has a better Return On Equity (16.87%) than 76.87% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.38%, AFG is in line with its industry, outperforming 53.06% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AFG is in line with the industry average of 4.44%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.36% | ||
| ROE | 16.87% | ||
| ROIC | 2.38% |
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
Looking at the Profit Margin, with a value of 9.70%, AFG is in the better half of the industry, outperforming 61.90% 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 (12.28%) which is in line with its industry peers.
In the last couple of years the Operating Margin of AFG has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.28% | ||
| PM (TTM) | 9.7% | ||
| 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
AFG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
AFG has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AFG has been reduced compared to 5 years ago.
AFG has a better debt/assets ratio than last year.
2.2 Solvency
AFG has an Altman-Z score of 0.79. This is a bad value and indicates that AFG is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 0.79, AFG is doing good in the industry, outperforming 75.51% of the companies in the same industry.
The Debt to FCF ratio of AFG is 1.41, which is an excellent value as it means it would take AFG, only 1.41 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AFG (1.41) is comparable to the rest of the industry.
A Debt/Equity ratio of 0.38 indicates that AFG is not too dependend on debt financing.
The Debt to Equity ratio of AFG (0.38) is worse than 61.22% of its industry peers.
Although AFG does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 0.79 |
ROIC/WACC0.29
WACC8.24%
2.3 Liquidity
A Current Ratio of 9.26 indicates that AFG has no problem at all paying its short term obligations.
AFG has a better Current ratio (9.26) than 96.60% of its industry peers.
AFG has a Quick Ratio of 9.26. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 9.26, AFG belongs to the best of the industry, outperforming 96.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 9.26 | ||
| Quick Ratio | 9.26 |
3. Growth
3.1 Past
AFG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.78%.
Measured over the past 5 years, AFG shows a small growth in Earnings Per Share. The EPS has been growing by 4.54% on average per year.
AFG shows a small growth in Revenue. In the last year, the Revenue has grown by 0.13%.
Measured over the past years, AFG shows a small growth in Revenue. The Revenue has been growing by 0.16% on average per year.
EPS 1Y (TTM)-6.78%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%16.45%
Revenue 1Y (TTM)0.13%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%-2.04%
3.2 Future
The Earnings Per Share is expected to grow by 4.58% on average over the next years.
AFG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.31% yearly.
EPS Next Y-9.02%
EPS Next 2Y4.04%
EPS Next 3Y4.58%
EPS Next 5YN/A
Revenue Next Year0.75%
Revenue Next 2Y3.94%
Revenue Next 3Y3.31%
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 stable.
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 14.23.
Compared to the rest of the industry, the Price/Earnings ratio of AFG is on the same level as its industry peers.
AFG is valuated rather cheaply when we compare the Price/Earnings ratio to 25.56, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.94, 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.
When comparing the Price/Forward Earnings ratio of AFG to the average of the S&P500 Index (34.62), we can say AFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.23 | ||
| Fwd PE | 11.94 |
4.2 Price Multiples
AFG's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AFG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.97 | ||
| EV/EBITDA | 10.83 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.13
EPS Next 2Y4.04%
EPS Next 3Y4.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.46%, AFG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.51, AFG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.44, AFG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
5.2 History
On average, the dividend of AFG grows each year by 13.64%, which is quite nice.
AFG has been paying a dividend for at least 10 years, so it has a reliable track record.
AFG has decreased its dividend recently.
Dividend Growth(5Y)13.64%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
96.49% of the earnings are spent on dividend by AFG. This is not a sustainable payout ratio.
AFG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP96.49%
EPS Next 2Y4.04%
EPS Next 3Y4.58%
138.89
-3.55 (-2.49%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners67.24%
Inst Owner Change0.34%
Ins Owners17.97%
Ins Owner Change1.48%
Market Cap11.58B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target140.15 (0.91%)
Short Float %2.27%
Short Ratio3.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
Yearly Dividend9.4
Dividend Growth(5Y)13.64%
DP96.49%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.9%
Min EPS beat(2)1.66%
Max EPS beat(2)6.15%
EPS beat(4)2
Avg EPS beat(4)-1.05%
Min EPS beat(4)-11.61%
Max EPS beat(4)6.15%
EPS beat(8)4
Avg EPS beat(8)-1.25%
EPS beat(12)5
Avg EPS beat(12)-2.16%
EPS beat(16)9
Avg EPS beat(16)4.6%
Revenue beat(2)0
Avg Revenue beat(2)-3.89%
Min Revenue beat(2)-7.78%
Max Revenue beat(2)0%
Revenue beat(4)1
Avg Revenue beat(4)-2.85%
Min Revenue beat(4)-10.18%
Max Revenue beat(4)6.57%
Revenue beat(8)3
Avg Revenue beat(8)-1.94%
Revenue beat(12)5
Avg Revenue beat(12)0.24%
Revenue beat(16)9
Avg Revenue beat(16)4.53%
PT rev (1m)3.62%
PT rev (3m)4.25%
EPS NQ rev (1m)0.72%
EPS NQ rev (3m)-0.01%
EPS NY rev (1m)2.49%
EPS NY rev (3m)-3.65%
Revenue NQ rev (1m)-1.17%
Revenue NQ rev (3m)-2.68%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.23 | ||
| Fwd PE | 11.94 | ||
| P/S | 1.41 | ||
| P/FCF | 8.97 | ||
| P/OCF | 8.14 | ||
| P/B | 2.45 | ||
| P/tB | 2.75 | ||
| EV/EBITDA | 10.83 |
EPS(TTM)9.76
EY7.03%
EPS(NY)11.64
Fwd EY8.38%
FCF(TTM)15.48
FCFY11.15%
OCF(TTM)17.06
OCFY12.29%
SpS98.64
BVpS56.72
TBVpS50.5
PEG (NY)N/A
PEG (5Y)3.13
Graham Number111.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.36% | ||
| ROE | 16.87% | ||
| ROCE | 3.01% | ||
| ROIC | 2.38% | ||
| ROICexc | 2.52% | ||
| ROICexgc | 2.77% | ||
| OM | 12.28% | ||
| PM (TTM) | 9.7% | ||
| GM | N/A | ||
| FCFM | 15.69% |
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%
ROICexgc growth 3Y-11.18%
ROICexgc 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-Score5
Asset Turnover0.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.41 | ||
| Debt/EBITDA | 1.66 | ||
| Cap/Depr | 155.29% | ||
| Cap/Sales | 1.6% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 129.95% | ||
| Profit Quality | 161.78% | ||
| Current Ratio | 9.26 | ||
| Quick Ratio | 9.26 | ||
| Altman-Z | 0.79 |
F-Score5
WACC8.24%
ROIC/WACC0.29
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)-6.78%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%16.45%
EPS Next Y-9.02%
EPS Next 2Y4.04%
EPS Next 3Y4.58%
EPS Next 5YN/A
Revenue 1Y (TTM)0.13%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%-2.04%
Revenue Next Year0.75%
Revenue Next 2Y3.94%
Revenue Next 3Y3.31%
Revenue Next 5YN/A
EBIT growth 1Y-7.08%
EBIT growth 3Y-8.95%
EBIT growth 5Y-2.09%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y1.65%
FCF growth 3Y-14.88%
FCF growth 5Y-15.83%
OCF growth 1Y7.48%
OCF growth 3Y-12.4%
OCF growth 5Y-14.05%
AMERICAN FINANCIAL GROUP INC / AFG FAQ
What is the ChartMill fundamental rating of AMERICAN FINANCIAL GROUP INC (AFG) stock?
ChartMill assigns a fundamental rating of 5 / 10 to AFG.
Can you provide the valuation status for AMERICAN FINANCIAL GROUP INC?
ChartMill assigns a valuation rating of 4 / 10 to AMERICAN FINANCIAL GROUP INC (AFG). This can be considered as Fairly Valued.
How profitable is AMERICAN FINANCIAL GROUP INC (AFG) stock?
AMERICAN FINANCIAL GROUP INC (AFG) has a profitability rating of 4 / 10.
Can you provide the PE and PB ratios for AFG stock?
The Price/Earnings (PE) ratio for AMERICAN FINANCIAL GROUP INC (AFG) is 14.23 and the Price/Book (PB) ratio is 2.45.
Can you provide the expected EPS growth for AFG stock?
The Earnings per Share (EPS) of AMERICAN FINANCIAL GROUP INC (AFG) is expected to decline by -9.02% in the next year.