AMERICAN FINANCIAL GROUP INC (AFG)

US0259321042 - Common Stock

136.48  -0.32 (-0.23%)

After market: 136.48 0 (0%)

Fundamental Rating

6

Taking everything into account, AFG scores 6 out of 10 in our fundamental rating. AFG was compared to 140 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 decent growth rate and is not valued too expensively.



6

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.
Each year in the past 5 years AFG has been profitable.
In the past 5 years AFG always reported a positive cash flow from operatings.

1.2 Ratios

AFG's Return On Assets of 2.86% is fine compared to the rest of the industry. AFG outperforms 63.31% of its industry peers.
The Return On Equity of AFG (20.01%) is better than 82.01% of its industry peers.
AFG has a Return On Invested Capital of 3.06%. This is in the better half of the industry: AFG outperforms 70.50% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AFG is in line with the industry average of 4.02%.
Industry RankSector Rank
ROA 2.86%
ROE 20.01%
ROIC 3.06%
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

AFG has a Profit Margin of 10.87%. This is in the better half of the industry: AFG outperforms 67.63% of its industry peers.
AFG's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 14.49%, AFG is doing good in the industry, outperforming 65.47% of the companies in the same industry.
In the last couple of years the Operating Margin of AFG has grown nicely.
Industry RankSector Rank
OM 14.49%
PM (TTM) 10.87%
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

7

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AFG is destroying value.
AFG has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, AFG has less shares outstanding
Compared to 1 year ago, AFG has an improved debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 0.84, we must say that AFG is in the distress zone and has some risk of bankruptcy.
With an excellent Altman-Z score value of 0.84, AFG belongs to the best of the industry, outperforming 80.58% of the companies in the same industry.
The Debt to FCF ratio of AFG is 0.78, which is an excellent value as it means it would take AFG, only 0.78 years of fcf income to pay off all of its debts.
AFG has a better Debt to FCF ratio (0.78) than 76.98% of its industry peers.
AFG has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.35, AFG perfoms like the industry average, outperforming 53.24% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.35
Debt/FCF 0.78
Altman-Z 0.84
ROIC/WACC0.37
WACC8.28%

2.3 Liquidity

AFG has a Current Ratio of 5.91. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 5.91, AFG belongs to the best of the industry, outperforming 94.24% of the companies in the same industry.
A Quick Ratio of 5.91 indicates that AFG has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 5.91, AFG belongs to the best of the industry, outperforming 94.24% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 5.91
Quick Ratio 5.91

5

3. Growth

3.1 Past

AFG shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -9.28%.
AFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.68% yearly.
Looking at the last year, AFG shows a quite strong growth in Revenue. The Revenue has grown by 11.32% in the last year.
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)-9.28%
EPS 3Y7.63%
EPS 5Y4.68%
EPS growth Q2Q-5.02%
Revenue 1Y (TTM)11.32%
Revenue growth 3Y10.77%
Revenue growth 5Y1.77%
Revenue growth Q2Q7.87%

3.2 Future

AFG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.07% yearly.
The Revenue is expected to grow by 5.75% on average over the next years.
EPS Next Y6.09%
EPS Next 2Y6.68%
EPS Next 3Y8.07%
EPS Next 5YN/A
Revenue Next Year8.48%
Revenue Next 2Y7.44%
Revenue Next 3Y5.75%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

5

4. Valuation

4.1 Price/Earnings Ratio

AFG is valuated correctly with a Price/Earnings ratio of 12.92.
AFG's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 26.48, AFG is valued rather cheaply.
With a Price/Forward Earnings ratio of 12.18, AFG is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AFG is on the same level as its industry peers.
AFG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.79.
Industry RankSector Rank
PE 12.92
Fwd PE 12.18

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, AFG is valued a bit cheaper than 61.87% of the companies in the same industry.
AFG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. AFG is cheaper than 66.91% of the companies in the same industry.
Industry RankSector Rank
P/FCF 6.02
EV/EBITDA 9.63

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)2.12
PEG (5Y)2.76
EPS Next 2Y6.68%
EPS Next 3Y8.07%

4

5. Dividend

5.1 Amount

AFG has a Yearly Dividend Yield of 2.13%.
AFG's Dividend Yield is a higher than the industry average which is at 4.13.
Compared to an average S&P500 Dividend Yield of 2.34, AFG has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.13%

5.2 History

On average, the dividend of AFG grows each year by 12.75%, which is quite nice.
AFG has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)12.75%
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

80.28% 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.
DP80.28%
EPS Next 2Y6.68%
EPS Next 3Y8.07%

AMERICAN FINANCIAL GROUP INC

NYSE:AFG (3/28/2024, 8:04:00 PM)

After market: 136.48 0 (0%)

136.48

-0.32 (-0.23%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap11.42B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 2.13%
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)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(12)
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Revenue beat(16)
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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 RankSector Rank
PE 12.92
Fwd PE 12.18
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)2.12
PEG (5Y)2.76
Profitability
Industry RankSector Rank
ROA 2.86%
ROE 20.01%
ROCE
ROIC
ROICexc
ROICexgc
OM 14.49%
PM (TTM) 10.87%
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 Turnover0.26
Health
Industry RankSector Rank
Debt/Equity 0.35
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 5.91
Quick Ratio 5.91
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)
Growth
EPS 1Y (TTM)-9.28%
EPS 3Y7.63%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.09%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)11.32%
Revenue growth 3Y10.77%
Revenue growth 5Y
Revenue growth 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