AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
NYSE:AFG - New York Stock Exchange, Inc. - US0259321042 - Common Stock - Currency: USD
Overall AFG gets a fundamental rating of 5 out of 10. We evaluated AFG against 143 industry peers in the Insurance industry. Both the profitability and the financial health of AFG get a neutral evaluation. Nothing too spectacular is happening here. AFG is not valued too expensively and it also shows a decent growth rate.
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.
AFG had positive earnings in each of the past 5 years.
Each year in the past 5 years AFG had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 2.88%, AFG is doing good in the industry, outperforming 62.94% of the companies in the same industry.
With an excellent Return On Equity value of 19.86%, AFG belongs to the best of the industry, outperforming 85.31% of the companies in the same industry.
AFG has a Return On Invested Capital (2.78%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for AFG is in line with the industry average of 4.27%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 19.86% | ||
| ROIC | 2.78% |
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 10.71%, AFG is in the better half of the industry, outperforming 65.73% 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 (12.98%) 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 | 12.98% | ||
| PM (TTM) | 10.71% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AFG is destroying value.
The number of shares outstanding for AFG has been increased compared to 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
Based on the Altman-Z score of 0.80, we must say that AFG is in the distress zone and has some risk of bankruptcy.
AFG has a Altman-Z score of 0.80. This is in the better half of the industry: AFG outperforms 79.02% of its industry peers.
AFG has a debt to FCF ratio of 1.45. This is a very positive value and a sign of high solvency as it would only need 1.45 years to pay back of all of its debts.
AFG has a Debt to FCF ratio of 1.45. This is comparable to the rest of the industry: AFG outperforms 51.05% of its industry peers.
AFG has a Debt/Equity ratio of 0.33. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of AFG (0.33) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 1.45 | ||
| Altman-Z | 0.8 |
ROIC/WACC0.33
WACC8.49%
2.3 Liquidity
AFG has a Current Ratio of 4.84. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 4.84, AFG belongs to the best of the industry, outperforming 95.80% of the companies in the same industry.
A Quick Ratio of 4.84 indicates that AFG has no problem at all paying its short term obligations.
AFG has a better Quick ratio (4.84) than 95.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.84 | ||
| Quick Ratio | 4.84 |
3. Growth
3.1 Past
The earnings per share for AFG have decreased by -6.04% 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 2.87%.
AFG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.16% yearly.
EPS 1Y (TTM)-6.04%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%-34.42%
Revenue 1Y (TTM)2.87%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%2.2%
3.2 Future
Based on estimates for the next years, AFG will show a small growth in Earnings Per Share. The EPS will grow by 4.22% on average per year.
The Revenue is expected to grow by 2.54% on average over the next years.
EPS Next Y-2.65%
EPS Next 2Y5.49%
EPS Next 3Y4.22%
EPS Next 5YN/A
Revenue Next Year0.52%
Revenue Next 2Y3.71%
Revenue Next 3Y2.54%
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.
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
Based on the Price/Earnings ratio of 12.40, the valuation of AFG can be described as correct.
AFG's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 25.82. AFG is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 10.16, the valuation of AFG can be described as very reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as AFG.
When comparing the Price/Forward Earnings ratio of AFG to the average of the S&P500 Index (21.76), we can say AFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.4 | ||
| Fwd PE | 10.16 |
4.2 Price Multiples
AFG's Enterprise Value to EBITDA is on the same level as 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 | 9.98 | ||
| EV/EBITDA | 8.85 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.73
EPS Next 2Y5.49%
EPS Next 3Y4.22%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.60%, AFG has a reasonable but not impressive dividend return.
AFG's Dividend Yield is a higher than the industry average which is at 3.23.
AFG's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
5.2 History
On average, the dividend of AFG grows each year by 13.64%, which is quite nice.
AFG has paid a dividend for at least 10 years, which is 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
AFG pays out 88.84% of its income as dividend. This is not a sustainable payout ratio.
The dividend of AFG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP88.84%
EPS Next 2Y5.49%
EPS Next 3Y4.22%
121.54
+0.14 (+0.12%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners65.31%
Inst Owner Change1.26%
Ins Owners14.5%
Ins Owner Change1.58%
Market Cap10.15B
Analysts70.91
Price Target135.46 (11.45%)
Short Float %2.06%
Short Ratio2.35
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.6% |
Yearly Dividend9.4
Dividend Growth(5Y)13.64%
DP88.84%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.88%
Min EPS beat(2)-7.36%
Max EPS beat(2)-0.4%
EPS beat(4)2
Avg EPS beat(4)-0.76%
Min EPS beat(4)-7.36%
Max EPS beat(4)3.61%
EPS beat(8)2
Avg EPS beat(8)-3.23%
EPS beat(12)6
Avg EPS beat(12)3.37%
EPS beat(16)10
Avg EPS beat(16)12.94%
Revenue beat(2)2
Avg Revenue beat(2)9.25%
Min Revenue beat(2)6.57%
Max Revenue beat(2)11.93%
Revenue beat(4)2
Avg Revenue beat(4)-0.16%
Min Revenue beat(4)-10.89%
Max Revenue beat(4)11.93%
Revenue beat(8)4
Avg Revenue beat(8)-0.26%
Revenue beat(12)8
Avg Revenue beat(12)5.58%
Revenue beat(16)12
Avg Revenue beat(16)9.74%
PT rev (1m)-2.64%
PT rev (3m)-10.87%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.74%
EPS NY rev (1m)-1.05%
EPS NY rev (3m)-0.88%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.68%
Revenue NY rev (1m)-6.49%
Revenue NY rev (3m)-6.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.4 | ||
| Fwd PE | 10.16 | ||
| P/S | 1.23 | ||
| P/FCF | 9.98 | ||
| P/OCF | 8.83 | ||
| P/B | 2.28 | ||
| P/tB | 2.57 | ||
| EV/EBITDA | 8.85 |
EPS(TTM)9.8
EY8.06%
EPS(NY)11.96
Fwd EY9.84%
FCF(TTM)12.18
FCFY10.02%
OCF(TTM)13.77
OCFY11.33%
SpS98.97
BVpS53.38
TBVpS47.3
PEG (NY)N/A
PEG (5Y)2.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.88% | ||
| ROE | 19.86% | ||
| ROCE | 3.51% | ||
| ROIC | 2.78% | ||
| ROICexc | 2.91% | ||
| ROICexgc | 3.19% | ||
| OM | 12.98% | ||
| PM (TTM) | 10.71% | ||
| GM | N/A | ||
| FCFM | 12.31% |
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-Score6
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.33 | ||
| Debt/FCF | 1.45 | ||
| Debt/EBITDA | 1.28 | ||
| Cap/Depr | 164.2% | ||
| Cap/Sales | 1.61% | ||
| Interest Coverage | 14.53 | ||
| Cash Conversion | 99.65% | ||
| Profit Quality | 114.88% | ||
| Current Ratio | 4.84 | ||
| Quick Ratio | 4.84 | ||
| Altman-Z | 0.8 |
F-Score6
WACC8.49%
ROIC/WACC0.33
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)-6.04%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%-34.42%
EPS Next Y-2.65%
EPS Next 2Y5.49%
EPS Next 3Y4.22%
EPS Next 5YN/A
Revenue 1Y (TTM)2.87%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%2.2%
Revenue Next Year0.52%
Revenue Next 2Y3.71%
Revenue Next 3Y2.54%
Revenue Next 5YN/A
EBIT growth 1Y-5.37%
EBIT growth 3Y-8.95%
EBIT growth 5Y-2.09%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-46.31%
FCF growth 3Y-14.88%
FCF growth 5Y-15.83%
OCF growth 1Y-41.52%
OCF growth 3Y-12.4%
OCF growth 5Y-14.05%