AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:AFG • US0259321042
130.27 USD
+1.46 (+1.13%)
At close: Jan 30, 2026
130.27 USD
0 (0%)
After Hours: 1/30/2026, 8:04:00 PM
AFG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 148 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 correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year AFG was profitable.
- In the past year AFG had a positive cash flow from operations.
- In the past 5 years AFG has always been profitable.
- In the past 5 years AFG always reported a positive cash flow from operatings.
1.2 Ratios
- The Return On Assets of AFG (2.36%) is comparable to the rest of the industry.
- Looking at the Return On Equity, with a value of 16.87%, AFG is in the better half of the industry, outperforming 74.32% of the companies in the same industry.
- The Return On Invested Capital of AFG (2.38%) is comparable to the rest of the industry.
- The Average Return On Invested Capital over the past 3 years for AFG is significantly below the industry average of 14.94%.
| 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 (9.70%) which is comparable to the rest of the industry.
- AFG's Profit Margin has been stable in the last couple of years.
- The Operating Margin of AFG (12.28%) is comparable to the rest of the industry.
- AFG's Operating Margin has declined in the last couple of years.
| 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.
- The number of shares outstanding for AFG has been reduced compared to 5 years ago.
- The debt/assets ratio for AFG has been reduced compared to a year ago.
2.2 Solvency
- AFG has an Altman-Z score of 0.77. This is a bad value and indicates that AFG is not financially healthy and even has some risk of bankruptcy.
- AFG has a Altman-Z score of 0.77. This is in the better half of the industry: AFG outperforms 77.70% 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.
- With a Debt to FCF ratio value of 1.41, AFG perfoms like the industry average, outperforming 57.43% of the companies in the same industry.
- AFG has a Debt/Equity ratio of 0.38. This is a healthy value indicating a solid balance between debt and equity.
- AFG has a Debt to Equity ratio of 0.38. This is in the lower half of the industry: AFG underperforms 60.81% 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 | 0.77 |
ROIC/WACC0.29
WACC8.31%
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 96.62% 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.
- AFG's Quick ratio of 9.26 is amongst the best of the industry. AFG outperforms 96.62% 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%.
- Measured over the past 5 years, AFG shows a small growth in Earnings Per Share. The EPS has been growing by 4.54% on average per year.
- AFG shows a small growth in Revenue. In the last year, the Revenue has grown by 0.13%.
- Measured over the past years, AFG shows a small growth in Revenue. The Revenue has been growing by 0.16% on average per year.
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 5.73% on average per year.
- AFG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.36% yearly.
EPS Next Y-6.43%
EPS Next 2Y3.38%
EPS Next 3Y4.65%
EPS Next 5Y5.73%
Revenue Next Year0.56%
Revenue Next 2Y2.73%
Revenue Next 3Y3.21%
Revenue Next 5Y3.36%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better 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
- Based on the Price/Earnings ratio of 13.35, the valuation of AFG can be described as correct.
- Compared to the rest of the industry, the Price/Earnings ratio of AFG is on the same level as its industry peers.
- When comparing the Price/Earnings ratio of AFG to the average of the S&P500 Index (28.30), we can say AFG is valued rather cheaply.
- With a Price/Forward Earnings ratio of 11.34, the valuation of AFG can be described as very reasonable.
- The rest of the industry has a similar Price/Forward Earnings ratio as AFG.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, AFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.35 | ||
| Fwd PE | 11.34 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AFG is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of AFG is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.42 | ||
| EV/EBITDA | 9.79 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.94
EPS Next 2Y3.38%
EPS Next 3Y4.65%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.74%, AFG has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.41, AFG pays a bit more dividend than its industry peers.
- AFG's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
- On average, the dividend of AFG grows each year by 13.64%, which is quite nice.
- 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.
- AFG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP96.49%
EPS Next 2Y3.38%
EPS Next 3Y4.65%
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.
What is the valuation status of AMERICAN FINANCIAL GROUP INC (AFG) stock?
ChartMill assigns a valuation rating of 4 / 10 to AMERICAN FINANCIAL GROUP INC (AFG). This can be considered as Fairly Valued.
What is the profitability of AFG stock?
AMERICAN FINANCIAL GROUP INC (AFG) has a profitability rating of 4 / 10.
What is the valuation of AMERICAN FINANCIAL GROUP INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for AMERICAN FINANCIAL GROUP INC (AFG) is 13.35 and the Price/Book (PB) ratio is 2.3.
What is the expected EPS growth for AMERICAN FINANCIAL GROUP INC (AFG) stock?
The Earnings per Share (EPS) of AMERICAN FINANCIAL GROUP INC (AFG) is expected to decline by -6.43% in the next year.