AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFG - US0259321042 - Common Stock
137.23 USD
+1.16 (+0.85%)
137.23 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. AFG is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. AFG is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year AFG was profitable.
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
AFG has a Return On Assets (2.36%) which is comparable to the rest of the industry.
The Return On Equity of AFG (16.87%) is better than 73.47% of its industry peers.
AFG has a Return On Invested Capital (2.38%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for AFG is significantly below the industry average of 14.89%.
| 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 line with its industry, outperforming 56.46% of the companies in the same industry.
In the last couple of years the Profit Margin of AFG has remained more or less at the same level.
The Operating Margin of AFG (12.28%) is comparable to the rest of the industry.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AFG is destroying value.
AFG has more shares outstanding than it did 1 year ago.
AFG has less shares outstanding than it did 5 years ago.
AFG has a better debt/assets ratio than last year.
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.
With a decent Altman-Z score value of 0.78, AFG is doing good in the industry, outperforming 76.87% 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.
Looking at the Debt to FCF ratio, with a value of 1.41, AFG is in line with its industry, outperforming 57.82% of the companies in the same 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.
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 | 0.78 |
ROIC/WACC0.29
WACC8.28%
2.3 Liquidity
A Current Ratio of 9.26 indicates that AFG has no problem at all paying its short term obligations.
AFG's Current ratio of 9.26 is amongst the best of the industry. AFG outperforms 96.60% of its industry peers.
A Quick Ratio of 9.26 indicates that AFG has no problem at all paying its short term obligations.
AFG's Quick ratio of 9.26 is amongst the best of the industry. AFG outperforms 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%.
AFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
Looking at the last year, AFG shows a small growth in Revenue. The Revenue has grown by 0.13% in the last year.
AFG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.16% yearly.
EPS 1Y (TTM)-6.78%
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 4.43% on average per year.
Based on estimates for the next years, AFG will show a small growth in Revenue. The Revenue will grow by 3.14% on average per year.
EPS Next Y-6.66%
EPS Next 2Y3.4%
EPS Next 3Y4.43%
EPS Next 5YN/A
Revenue Next Year0.48%
Revenue Next 2Y2.67%
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 14.06.
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 26.56, AFG is valued a bit cheaper.
With a Price/Forward Earnings ratio of 11.94, the valuation of AFG can be described as very reasonable.
AFG's Price/Forward Earnings ratio is in line with the industry average.
AFG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.79, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.06 | ||
| Fwd PE | 11.94 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AFG.
AFG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.87 | ||
| EV/EBITDA | 10.43 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.1
EPS Next 2Y3.4%
EPS Next 3Y4.43%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 2.59%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.64, AFG pays a bit more dividend than its industry peers.
AFG's Dividend Yield is a higher than the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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
AFG pays out 96.49% 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.
DP96.49%
EPS Next 2Y3.4%
EPS Next 3Y4.43%
137.23
+1.16 (+0.85%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners68.31%
Inst Owner Change0.58%
Ins Owners17.96%
Ins Owner Change-0.35%
Market Cap11.44B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target142.39 (3.76%)
Short Float %2.23%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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)1.6%
PT rev (3m)5.28%
EPS NQ rev (1m)1.27%
EPS NQ rev (3m)1.65%
EPS NY rev (1m)2.6%
EPS NY rev (3m)5.61%
Revenue NQ rev (1m)-1.46%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.06 | ||
| Fwd PE | 11.94 | ||
| P/S | 1.39 | ||
| P/FCF | 8.87 | ||
| P/OCF | 8.04 | ||
| P/B | 2.42 | ||
| P/tB | 2.72 | ||
| EV/EBITDA | 10.43 |
EPS(TTM)9.76
EY7.11%
EPS(NY)11.49
Fwd EY8.38%
FCF(TTM)15.48
FCFY11.28%
OCF(TTM)17.06
OCFY12.43%
SpS98.63
BVpS56.71
TBVpS50.49
PEG (NY)N/A
PEG (5Y)3.1
Graham Number111.6
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
WACC8.28%
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-6.66%
EPS Next 2Y3.4%
EPS Next 3Y4.43%
EPS Next 5YN/A
Revenue 1Y (TTM)0.13%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%-2.04%
Revenue Next Year0.48%
Revenue Next 2Y2.67%
Revenue Next 3Y3.14%
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 3 / 10 to AMERICAN FINANCIAL GROUP INC (AFG). This can be considered as Overvalued.
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 14.06 and the Price/Book (PB) ratio is 2.42.
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 -6.66% in the next year.