AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFG - US0259321042 - Common Stock
132.57 USD
-0.77 (-0.58%)
132.57 USD
0 (0%)
Overall AFG gets a fundamental rating of 5 out of 10. We evaluated AFG against 148 industry peers in the Insurance industry. While AFG has a great health rating, its profitability is only average at the moment. AFG has a correct valuation and a medium 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.
In the past 5 years AFG has always been profitable.
AFG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AFG's Return On Assets of 2.36% is in line compared to the rest of the industry. AFG outperforms 52.03% of its industry peers.
Looking at the Return On Equity, with a value of 16.87%, AFG is in the better half of the industry, outperforming 72.30% of the companies in the same industry.
With a Return On Invested Capital value of 2.38%, AFG perfoms like the industry average, outperforming 51.35% of the companies in the same industry.
AFG had an Average Return On Invested Capital over the past 3 years of 2.95%. This is in line with the industry average of 4.57%.
| 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
Looking at the Profit Margin, with a value of 9.70%, AFG is in line with its industry, outperforming 56.08% of the companies in the same industry.
AFG's Profit Margin has been stable in the last couple of years.
With a Operating Margin value of 12.28%, AFG perfoms like the industry average, outperforming 47.97% of the companies in the same 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.
The number of shares outstanding for AFG has been increased compared to 1 year ago.
AFG has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, AFG has an improved debt to assets ratio.
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.
With a decent Altman-Z score value of 0.77, AFG is doing good in the industry, outperforming 75.68% of the companies in the same industry.
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.
AFG's Debt to FCF ratio of 1.41 is in line compared to the rest of the industry. AFG outperforms 57.43% of its industry peers.
A Debt/Equity ratio of 0.38 indicates that AFG is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.38, AFG is not doing good in the industry: 61.49% of the companies in the same industry are doing better.
Although AFG does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.38 | ||
| Debt/FCF | 1.41 | ||
| Altman-Z | 0.77 |
ROIC/WACC0.29
WACC8.21%
2.3 Liquidity
A Current Ratio of 9.26 indicates that AFG has no problem at all paying its short term obligations.
With an excellent Current ratio value of 9.26, AFG belongs to the best 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.
Looking at the Quick 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.
| 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%.
AFG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 0.16% yearly.
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
The Earnings Per Share is expected to grow by 4.58% on average over the next years.
AFG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.31% yearly.
EPS Next Y-9.02%
EPS Next 2Y4.04%
EPS Next 3Y4.58%
EPS Next 5YN/A
Revenue Next Year0.75%
Revenue Next 2Y3.94%
Revenue Next 3Y3.31%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
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
Based on the Price/Earnings ratio of 13.58, the valuation of AFG can be described as correct.
AFG's Price/Earnings ratio is in line with the industry average.
AFG is valuated rather cheaply when we compare the Price/Earnings ratio to 26.46, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 11.39 indicates a reasonable valuation of AFG.
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 36.10, AFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.58 | ||
| Fwd PE | 11.39 |
4.2 Price Multiples
AFG's Enterprise Value to EBITDA ratio is in line with the industry average.
AFG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.56 | ||
| EV/EBITDA | 10.14 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.99
EPS Next 2Y4.04%
EPS Next 3Y4.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.64%, AFG has a reasonable but not impressive dividend return.
AFG's Dividend Yield is a higher than the industry average which is at 3.47.
Compared to an average S&P500 Dividend Yield of 2.32, AFG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
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
96.49% of the earnings are spent on dividend by AFG. 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 2Y4.04%
EPS Next 3Y4.58%
132.57
-0.77 (-0.58%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners68.31%
Inst Owner Change0.55%
Ins Owners17.96%
Ins Owner Change0.92%
Market Cap11.06B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target142.39 (7.41%)
Short Float %2.23%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.64% |
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)5.73%
PT rev (3m)7.35%
EPS NQ rev (1m)2.26%
EPS NQ rev (3m)1.9%
EPS NY rev (1m)0%
EPS NY rev (3m)2.94%
Revenue NQ rev (1m)-2.61%
Revenue NQ rev (3m)-4.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.58 | ||
| Fwd PE | 11.39 | ||
| P/S | 1.34 | ||
| P/FCF | 8.56 | ||
| P/OCF | 7.77 | ||
| P/B | 2.34 | ||
| P/tB | 2.63 | ||
| EV/EBITDA | 10.14 |
EPS(TTM)9.76
EY7.36%
EPS(NY)11.64
Fwd EY8.78%
FCF(TTM)15.48
FCFY11.68%
OCF(TTM)17.06
OCFY12.87%
SpS98.63
BVpS56.71
TBVpS50.49
PEG (NY)N/A
PEG (5Y)2.99
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 | 0.77 |
F-Score5
WACC8.21%
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-9.02%
EPS Next 2Y4.04%
EPS Next 3Y4.58%
EPS Next 5YN/A
Revenue 1Y (TTM)0.13%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%-2.04%
Revenue Next Year0.75%
Revenue Next 2Y3.94%
Revenue Next 3Y3.31%
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 4 / 10 to AMERICAN FINANCIAL GROUP INC (AFG). This can be considered as Fairly Valued.
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 13.58 and the Price/Book (PB) ratio is 2.34.
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 -9.02% in the next year.