AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - NYSE:AFG - US0259321042 - Common Stock
138.44 USD
-0.45 (-0.32%)
138.44 USD
0 (0%)
AFG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 147 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.
1. Profitability
1.1 Basic Checks
In the past year AFG was profitable.
AFG had a positive operating cash flow in the past year.
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 has a Return On Assets of 2.36%. This is comparable to the rest of the industry: AFG outperforms 53.06% of its industry peers.
The Return On Equity of AFG (16.87%) is better than 76.87% of its industry peers.
With a Return On Invested Capital value of 2.38%, AFG perfoms like the industry average, 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
AFG has a Profit Margin of 9.70%. This is in the better half of the industry: AFG outperforms 61.90% of its industry peers.
In the last couple of years the Profit Margin of AFG has remained more or less at the same level.
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.
Compared to 1 year ago, AFG has more shares outstanding
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 0.78, we must say that AFG is in the distress zone and has some risk of bankruptcy.
AFG's Altman-Z score of 0.78 is fine compared to the rest of the industry. AFG outperforms 75.51% of its industry peers.
AFG has a debt to FCF ratio of 1.41. This is a very positive value and a sign of high solvency as it would only need 1.41 years to pay back of all of its debts.
AFG has a Debt to FCF ratio (1.41) which 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.
AFG has a Debt to Equity ratio of 0.38. This is in the lower half of the industry: AFG underperforms 61.22% of its industry peers.
Even though the debt/equity ratio score it not favorable for AFG, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 0.78 |
ROIC/WACC0.29
WACC8.23%
2.3 Liquidity
AFG has a Current Ratio of 9.26. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 9.26, AFG belongs to the top of the industry, outperforming 96.60% of the companies in the same industry.
A Quick Ratio of 9.26 indicates that AFG has no problem at all paying its short term obligations.
The Quick ratio of AFG (9.26) is better than 96.60% of its industry peers.
| 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%.
The Earnings Per Share has been growing slightly by 4.54% on average over the past years.
The Revenue has been growing slightly by 0.13% in the past year.
The Revenue has been growing slightly by 0.16% on average over the past years.
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
Based on estimates for the next years, AFG will show a small growth in Earnings Per Share. The EPS will grow by 4.58% on average per year.
Based on estimates for the next years, AFG will show a small growth in Revenue. The Revenue will grow by 3.31% on average per year.
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
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
A Price/Earnings ratio of 14.18 indicates a correct valuation of AFG.
The rest of the industry has a similar Price/Earnings ratio as AFG.
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 11.90, the valuation of AFG can be described as very reasonable.
AFG's Price/Forward Earnings is on the same level as the industry average.
AFG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.62.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.18 | ||
| Fwd PE | 11.9 |
4.2 Price Multiples
AFG's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as AFG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.94 | ||
| EV/EBITDA | 10.56 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.12
EPS Next 2Y4.04%
EPS Next 3Y4.58%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 2.46%. Purely for dividend investing, there may be better candidates out there.
AFG's Dividend Yield is a higher than the industry average which is at 3.51.
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
The dividend of AFG is nicely growing with an annual growth rate of 13.64%!
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
96.49% of the earnings are spent on dividend by AFG. 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.
DP96.49%
EPS Next 2Y4.04%
EPS Next 3Y4.58%
138.44
-0.45 (-0.32%)
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 Cap11.54B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target140.15 (1.24%)
Short Float %1.71%
Short Ratio2.32
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 | 14.18 | ||
| Fwd PE | 11.9 | ||
| P/S | 1.4 | ||
| P/FCF | 8.94 | ||
| P/OCF | 8.11 | ||
| P/B | 2.44 | ||
| P/tB | 2.74 | ||
| EV/EBITDA | 10.56 |
EPS(TTM)9.76
EY7.05%
EPS(NY)11.64
Fwd EY8.41%
FCF(TTM)15.48
FCFY11.18%
OCF(TTM)17.06
OCFY12.33%
SpS98.64
BVpS56.72
TBVpS50.5
PEG (NY)N/A
PEG (5Y)3.12
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 | 0.78 |
F-Score5
WACC8.23%
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 14.18 and the Price/Book (PB) ratio is 2.44.
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.