NYSE:AFG

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

American Financial Group

Market Cap

US$10.6b

Last Updated

2021/06/24 02:35 UTC

Data Sources

Company Financials +

Executive Summary

American Financial Group, Inc., an insurance holding company, provides property and casualty insurance products in the United States. More Details


Snowflake Analysis

Flawless balance sheet with proven track record.


Similar Companies

Share Price & News

How has American Financial Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AFG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: AFG's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

-1.8%

AFG

-3.2%

US Insurance

0.5%

US Market


1 Year Return

106.0%

AFG

38.6%

US Insurance

42.6%

US Market

Return vs Industry: AFG exceeded the US Insurance industry which returned 38.6% over the past year.

Return vs Market: AFG exceeded the US Market which returned 42.6% over the past year.


Shareholder returns

AFGIndustryMarket
7 Day-1.8%-3.2%0.5%
30 Day-5.6%-4.6%1.9%
90 Day6.5%3.5%7.9%
1 Year140.1%106.0%42.2%38.6%44.9%42.6%
3 Year48.3%17.5%35.8%25.9%64.4%54.1%
5 Year137.9%72.6%78.6%56.5%128.3%102.7%

Long-Term Price Volatility Vs. Market

How volatile is American Financial Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is American Financial Group undervalued compared to its fair value and its price relative to the market?

12.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AFG ($124.33) is trading below our estimate of fair value ($141.99)

Significantly Below Fair Value: AFG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AFG is good value based on its PE Ratio (9.6x) compared to the US Insurance industry average (10.3x).

PE vs Market: AFG is good value based on its PE Ratio (9.6x) compared to the US market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: AFG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: AFG is overvalued based on its PB Ratio (1.6x) compared to the US Insurance industry average (1.1x).


Future Growth

How is American Financial Group forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

-38.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AFG's earnings are forecast to decline over the next 3 years (-38.5% per year).

Earnings vs Market: AFG's earnings are forecast to decline over the next 3 years (-38.5% per year).

High Growth Earnings: AFG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: AFG's revenue is expected to decline over the next 3 years (-13.3% per year).

High Growth Revenue: AFG's revenue is forecast to decline over the next 3 years (-13.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if AFG's Return on Equity is forecast to be high in 3 years time


Past Performance

How has American Financial Group performed over the past 5 years?

7.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AFG has a large one-off loss of $413.0M impacting its March 31 2021 financial results.

Growing Profit Margin: AFG's current net profit margins (13.9%) are higher than last year (6.1%).


Past Earnings Growth Analysis

Earnings Trend: AFG's earnings have grown by 7.5% per year over the past 5 years.

Accelerating Growth: AFG's earnings growth over the past year (167%) exceeds its 5-year average (7.5% per year).

Earnings vs Industry: AFG earnings growth over the past year (167%) exceeded the Insurance industry 51.9%.


Return on Equity

High ROE: AFG's Return on Equity (16.9%) is considered low.


Financial Health

How is American Financial Group's financial position?


Financial Position Analysis

Short Term Liabilities: AFG's short term assets ($55.7B) exceed its short term liabilities ($48.5B).

Long Term Liabilities: AFG's short term assets ($55.7B) exceed its long term liabilities ($19.0B).


Debt to Equity History and Analysis

Debt Level: AFG's debt to equity ratio (28.7%) is considered satisfactory.

Reducing Debt: AFG's debt to equity ratio has reduced from 39.1% to 28.7% over the past 5 years.

Debt Coverage: AFG's debt is well covered by operating cash flow (118.6%).

Interest Coverage: AFG's interest payments on its debt are well covered by EBIT (19.7x coverage).


Balance Sheet


Dividend

What is American Financial Group current dividend yield, its reliability and sustainability?

1.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AFG's dividend (1.61%) is higher than the bottom 25% of dividend payers in the US market (1.3%).

High Dividend: AFG's dividend (1.61%) is low compared to the top 25% of dividend payers in the US market (3.46%).


Stability and Growth of Payments

Stable Dividend: AFG's dividend payments have been volatile in the past 10 years.

Growing Dividend: AFG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (14.6%), AFG's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.3yrs

Average management tenure


CEO

Stephen Lindner (65 yo)

16.42yrs

Tenure

US$9,596,240

Compensation

Mr. Stephen Craig Lindner has been Co-Chief Executive Officer, Co-President and Director of American Financial Group, Inc. since January 2005, 1996 and 1985 respectively. Mr. Lindner also serves as the Co...


CEO Compensation Analysis

Compensation vs Market: Stephen's total compensation ($USD9.60M) is about average for companies of similar size in the US market ($USD11.28M).

Compensation vs Earnings: Stephen's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: AFG's management team is seasoned and experienced (9.3 years average tenure).


Board Members

Experienced Board: AFG's board of directors are seasoned and experienced ( 12.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AFG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

American Financial Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: American Financial Group, Inc.
  • Ticker: AFG
  • Exchange: NYSE
  • Founded: 1872
  • Industry: Multi-line Insurance
  • Sector: Insurance
  • Market Cap: US$10.580b
  • Shares outstanding: 85.10m
  • Website: https://www.afginc.com

Number of Employees


Location

  • American Financial Group, Inc.
  • 301 East Fourth Street
  • Cincinnati
  • Ohio
  • 45202
  • United States

Listings


Biography

American Financial Group, Inc., an insurance holding company, provides property and casualty insurance products in the United States. The company operates through three segments: Property and Casualty Insu...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/24 02:35
End of Day Share Price2021/06/23 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.