AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFG - US0259321042 - Common Stock
138.16 USD
+0.07 (+0.05%)
138.16 USD
0 (0%)
AFG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 148 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 quite expensive at the moment. 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.
Each year in the past 5 years AFG has 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.
Looking at the Return On Equity, with a value of 16.87%, AFG is in the better half of the industry, outperforming 73.65% of the companies in the same industry.
AFG has a Return On Invested Capital (2.38%) which is comparable to the rest of the industry.
AFG had an Average Return On Invested Capital over the past 3 years of 2.95%. This is significantly below the industry average of 14.88%.
| 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's Profit Margin of 9.70% is in line compared to the rest of the industry. AFG outperforms 56.76% of its industry peers.
In the last couple of years the Profit Margin of AFG has remained more or less at the same level.
AFG has a Operating Margin (12.28%) which is in line with its industry peers.
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.
Compared to 1 year ago, AFG has more shares outstanding
The number of shares outstanding for AFG has been reduced compared to 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.
AFG has a better Altman-Z score (0.78) than 77.03% of its industry peers.
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 57.43% 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.
The Debt to Equity ratio of AFG (0.38) is worse than 61.49% 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 | 0.78 |
ROIC/WACC0.29
WACC8.23%
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.
AFG has a Quick Ratio of 9.26. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 9.26, AFG belongs to the best of the industry, outperforming 96.62% of the companies in the same industry.
| 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.
The Revenue has been growing slightly by 0.16% on average over the past years.
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
AFG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.53% yearly.
The Revenue is expected to grow by 3.20% on average over the next years.
EPS Next Y-6.66%
EPS Next 2Y3.48%
EPS Next 3Y4.53%
EPS Next 5YN/A
Revenue Next Year0.48%
Revenue Next 2Y2.71%
Revenue Next 3Y3.2%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 14.16, which indicates a correct valuation of AFG.
AFG's Price/Earnings is on the same level as the industry average.
AFG is valuated rather cheaply when we compare the Price/Earnings ratio to 26.92, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 12.00, which indicates a correct valuation of AFG.
The rest of the industry has a similar Price/Forward Earnings ratio as AFG.
When comparing the Price/Forward Earnings ratio of AFG to the average of the S&P500 Index (23.46), we can say AFG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.16 | ||
| Fwd PE | 12 |
4.2 Price Multiples
AFG's Enterprise Value to EBITDA ratio is in line with the industry average.
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 | 8.93 | ||
| EV/EBITDA | 10.5 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.12
EPS Next 2Y3.48%
EPS Next 3Y4.53%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 6.63%, which is a nice return.
AFG's Dividend Yield is rather good when compared to the industry average which is at 2.42. AFG pays more dividend than 91.22% of the companies in the same industry.
AFG's Dividend Yield is rather good when compared to the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.63% |
5.2 History
On average, the dividend of AFG grows each year by 13.64%, which is quite nice.
AFG has been paying a dividend for at least 10 years, so it has 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 2Y3.48%
EPS Next 3Y4.53%
138.16
+0.07 (+0.05%)
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 Cap11.52B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target143.41 (3.8%)
Short Float %1.83%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.63% |
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)0.29%
PT rev (3m)6.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)1.65%
EPS NY rev (1m)2.6%
EPS NY rev (3m)5.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.16 | ||
| Fwd PE | 12 | ||
| P/S | 1.4 | ||
| P/FCF | 8.93 | ||
| P/OCF | 8.1 | ||
| P/B | 2.44 | ||
| P/tB | 2.74 | ||
| EV/EBITDA | 10.5 |
EPS(TTM)9.76
EY7.06%
EPS(NY)11.51
Fwd EY8.33%
FCF(TTM)15.48
FCFY11.2%
OCF(TTM)17.06
OCFY12.35%
SpS98.63
BVpS56.71
TBVpS50.49
PEG (NY)N/A
PEG (5Y)3.12
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
WACC8.23%
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 2Y3.48%
EPS Next 3Y4.53%
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 2Y2.71%
Revenue Next 3Y3.2%
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 14.16 and the Price/Book (PB) ratio is 2.44.
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.