How Two Decades of Dividend Growth at American Financial Group (AFG) Shape Its Investment Appeal

• American Financial Group, Inc. announced that its Board of Directors approved an increase in the company’s regular annual dividend to US$3.52 from US$3.20 per share, to be paid quarterly at US$0.88 per share beginning in October 2025.
• This twentieth consecutive year of dividend increases highlights the company’s sustained track record of shareholder returns and a 10-year compound dividend growth rate of 12.3%.
• Let’s examine how twenty years of steady dividend growth impacts American Financial Group’s long-term investment narrative and market outlook.

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American Financial Group Investment Narrative Recap

American Financial Group’s appeal to shareholders often rests on belief in its disciplined capital management and resilience within specialty insurance, even as near-term headwinds put pressure on profits and margins. The latest 10% dividend increase underscores a long-term focus on rewarding shareholders, but does not materially alter the key short-term catalyst, which remains tied to alternative investment returns, or address heightened risks around underwriting profitability amid ongoing catastrophe losses and elevated loss costs.

Of the company’s recent updates, the February 2025 special cash dividend of US$2.00 per share stands out for its relevance to this latest dividend announcement, highlighting AFG’s ongoing commitment to capital returns. This dovetails with the company’s pattern of returning capital via both regular and special dividends, a practice that tends to support its narrative of disciplined capital management at times of excess earnings.

However, while dividend increases signal confidence, it is rising social inflation and litigation trends that investors should especially watch for, since...

Read the full narrative on American Financial Group (it's free!)

American Financial Group's outlook anticipates $7.6 billion in revenue and $1.1 billion in earnings by 2028. This reflects a projected annual revenue decline of 1.9% and an increase in earnings of $336 million from the current $764 million.

Uncover how American Financial Group's forecasts yield a $130.60 fair value, a 4% downside to its current price.

Exploring Other Perspectives

Simply Wall St Community members set fair value estimates for American Financial Group anywhere from US$130.60 to US$266.61, based on two perspectives. With underwriting profitability under pressure from recent loss trends, it is worth considering these different viewpoints to understand how perceptions of risk and potential reward can vary.

Explore 2 other fair value estimates on American Financial Group - why the stock might be worth just $130.60!

Build Your Own American Financial Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your American Financial Group research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free American Financial Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate American Financial Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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