NYSE:AFG

Stock Analysis Report

American Financial Group

Executive Summary

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


Snowflake Analysis

Solid track record established dividend payer.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

25.6%

AFG

13.0%

US Insurance

9.4%

US Market


1 Year Return

-17.9%

AFG

-15.4%

US Insurance

-6.8%

US Market

Return vs Industry: AFG underperformed the US Insurance industry which returned -25.5% over the past year.

Return vs Market: AFG underperformed the US Market which returned -15.1% over the past year.


Shareholder returns

AFGIndustryMarket
7 Day25.6%13.0%9.4%
30 Day-3.4%-8.8%-3.9%
90 Day-26.6%-23.6%-16.5%
1 Year-14.2%-17.9%-13.3%-15.4%-4.8%-6.8%
3 Year-1.3%-13.7%2.3%-5.9%23.4%15.2%
5 Year51.0%24.7%25.8%10.5%41.3%25.7%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AFG ($64.09) is trading below our estimate of fair value ($183.02)

Significantly Below Fair Value: AFG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AFG is good value based on its PE Ratio (6.4x) compared to the Insurance industry average (8.2x).

PE vs Market: AFG is good value based on its PE Ratio (6.4x) compared to the US market (12.4x).


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 (0.9x) compared to the US Insurance industry average (0.8x).


Next Steps

Future Growth

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

-4.1%

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 (-3% per year).

Earnings vs Market: AFG's earnings are forecast to decline over the next 3 years (-3% 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 (-23.7% per year).

High Growth Revenue: AFG's revenue is forecast to decline over the next 3 years (-23.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AFG's Return on Equity is forecast to be low in 3 years time (11.7%).


Next Steps

Past Performance

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

14.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AFG has high quality earnings.

Growing Profit Margin: AFG's current net profit margins (11.2%) are higher than last year (7.6%).


Past Earnings Growth Analysis

Earnings Trend: AFG's earnings have grown by 14.3% per year over the past 5 years.

Accelerating Growth: AFG's earnings growth over the past year (69.2%) exceeds its 5-year average (14.3% per year).

Earnings vs Industry: AFG earnings growth over the past year (69.2%) exceeded the Insurance industry 43.7%.


Return on Equity

High ROE: AFG's Return on Equity (13.9%) is considered low.


Next Steps

Financial Health

How is American Financial Group's financial position?


Financial Position Analysis

Short Term Liabilities: AFG's short term assets ($10.5B) do not cover its short term liabilities ($11.1B).

Long Term Liabilities: AFG's short term assets ($10.5B) do not cover its long term liabilities ($52.7B).


Debt to Equity History and Analysis

Debt Level: AFG's debt to equity ratio (41.1%) is considered high.

Reducing Debt: AFG's debt to equity ratio has increased from 21.1% to 41.1% over the past 5 years.

Debt Coverage: AFG's debt is well covered by operating cash flow (95.4%).

Interest Coverage: AFG's interest payments on its debt are well covered by EBIT (18.9x coverage).


Balance Sheet


Next Steps

Dividend

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

4.10%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: AFG's dividend (5.15%) is higher than the bottom 25% of dividend payers in the US market (2.05%).

High Dividend: AFG's dividend (5.15%) is low compared to the top 25% of dividend payers in the US market (5.71%).


Stability and Growth of Payments

Stable Dividend: AFG's dividends per share have been stable 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 (16.5%), AFG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AFG's dividends in 3 years are forecast to be well covered by earnings (38.1% payout ratio).


Next Steps

Management

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

8.1yrs

Average management tenure


CEO

Stephen Lindner (64yo)

15.25s

Tenure

US$10,457,420

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 ($USD10.19M) is above average for companies of similar size in the US market ($USD7.63M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Lindner
Co-President15.25yrsUS$10.46m5.36% $387.9m
Carl Lindner
Co-President29.25yrsUS$10.46m12.44% $899.4m
Joseph Consolino
Executive VP7.33yrsUS$4.78m0.24% $17.5m
Michelle Gillis
Senior VP & Chief Administrative Officer8.08yrsUS$1.08m0.041% $3.0m
Vito Peraino
Senior VP & General Counsel8.08yrsUS$2.00m0.11% $7.6m
James Evans
Executive Consultant & Director35.25yrsUS$614.16k0.14% $9.8m
John Rogers
Chief Information Security Officer & Divisional VP4.33yrsno datano data
Diane Weidner
Assistant Vice President of Investor Relations10.75yrsno datano data
Karl Grafe
VP, Assistant General Counsel & Secretaryno datano datano data
David Witzgall
VP & Treasurer14.92yrsno datano data

8.1yrs

Average Tenure

63.5yo

Average Age

Experienced Management: AFG's management team is seasoned and experienced (8.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Stephen Lindner
Co-President15.25yrsUS$10.46m5.36% $387.9m
Carl Lindner
Co-President29.25yrsUS$10.46m12.44% $899.4m
Joseph Consolino
Executive VP7.33yrsUS$4.78m0.24% $17.5m
James Evans
Executive Consultant & Director35.25yrsUS$614.16k0.14% $9.8m
John Von Lehman
Independent Director11.67yrsUS$269.93k0.012% $870.1k
Terry Jacobs
Independent Director16.83yrsUS$288.93k0.0039% $282.1k
John Berding
Director7.92yrsUS$4.88m0.063% $4.6m
William Verity
Independent Director18.25yrsUS$283.93k0.0074% $537.4k
Gregory Joseph
Lead Independent Director1.17yrsUS$314.77k0.12% $8.5m
Kenneth Ambrecht
Independent Director14.92yrsUS$278.93k0.041% $3.0m

15.9yrs

Average Tenure

65yo

Average Age

Experienced Board: AFG's board of directors are seasoned and experienced ( 15.9 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$7.233b
  • Shares outstanding: 89.86m
  • Website: https://www.afginc.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AFGNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1978
QFIDB (Deutsche Boerse AG)YesCommon StockDEEURNov 1978

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 Insurance, Annuity, and Other. It offers property and transportation insurance products, such as physical damage and liability coverage for buses, trucks, inland and ocean marine, agricultural-related products, and other commercial property coverages; specialty casualty insurance, including primarily excess and surplus, general liability, executive and professional liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers’ compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, surety and fidelity products, and trade credit insurance. The company sells its property and casualty insurance products through independent insurance agents and brokers, as well as through employee agents. It also provides traditional fixed, fixed-indexed, and variable-indexed annuities to the retail, financial institutions, registered investment advisor, and education markets. In addition, the company engages in the commercial real estate operations in Cincinnati, Whitefield, New Hampshire, Chesapeake Bay, Charleston, and Palm Beach. American Financial Group, Inc. was founded in 1872 and is headquartered in Cincinnati, Ohio. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 04:57
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.