AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFG - US0259321042 - Common Stock
137.95 USD
+0.49 (+0.36%)
137.95 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to AFG. AFG was compared to 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. While showing a medium growth rate, AFG is valued expensive at the moment.
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.
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.
AFG has a better Return On Equity (16.87%) than 73.65% of its industry peers.
The Return On Invested Capital of AFG (2.38%) 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.
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.
Compared to 1 year ago, AFG has more shares outstanding
AFG has less shares outstanding than it did 5 years ago.
AFG has a better debt/assets ratio than last year.
2.2 Solvency
AFG has an Altman-Z score of 0.78. This is a bad value and indicates that AFG is not financially healthy and even 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.
AFG has a Debt to FCF ratio (1.41) which is comparable to the rest of the 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 worse Debt to Equity ratio (0.38) than 61.49% of its industry peers.
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 | 0.78 |
ROIC/WACC0.29
WACC8.25%
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.
AFG has a better Current ratio (9.26) than 96.62% of its industry peers.
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.
AFG has a Quick ratio of 9.26. This is amongst the best in 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
The earnings per share for AFG have decreased by -6.78% in the last year.
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%.
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
Based on estimates for the next years, AFG will show a small growth in Earnings Per Share. The EPS will grow by 4.43% on average per year.
AFG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.14% yearly.
EPS Next Y-6.66%
EPS Next 2Y3.4%
EPS Next 3Y4.43%
EPS Next 5YN/A
Revenue Next Year0.48%
Revenue Next 2Y2.67%
Revenue Next 3Y3.14%
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.
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 14.13, the valuation of AFG can be described as correct.
AFG's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of AFG to the average of the S&P500 Index (26.61), we can say AFG is valued slightly cheaper.
AFG is valuated correctly with a Price/Forward Earnings ratio of 12.00.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AFG is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of AFG to the average of the S&P500 Index (24.01), we can say AFG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.13 | ||
| Fwd PE | 12 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AFG.
AFG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.91 | ||
| EV/EBITDA | 10.49 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.11
EPS Next 2Y3.4%
EPS Next 3Y4.43%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 2.55%. Purely for dividend investing, there may be better candidates out there.
AFG's Dividend Yield is a higher than the industry average which is at 2.30.
AFG's Dividend Yield is a higher than the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
5.2 History
The dividend of AFG is nicely growing with an annual growth rate of 13.64%!
AFG has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of AFG decreased 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.
AFG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP96.49%
EPS Next 2Y3.4%
EPS Next 3Y4.43%
137.95
+0.49 (+0.36%)
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 Cap11.51B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target142.39 (3.22%)
Short Float %1.83%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.55% |
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)1.6%
PT rev (3m)5.28%
EPS NQ rev (1m)-0.51%
EPS NQ rev (3m)1.65%
EPS NY rev (1m)2.6%
EPS NY rev (3m)5.61%
Revenue NQ rev (1m)-2.04%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.13 | ||
| Fwd PE | 12 | ||
| P/S | 1.4 | ||
| P/FCF | 8.91 | ||
| P/OCF | 8.09 | ||
| P/B | 2.43 | ||
| P/tB | 2.73 | ||
| EV/EBITDA | 10.49 |
EPS(TTM)9.76
EY7.08%
EPS(NY)11.49
Fwd EY8.33%
FCF(TTM)15.48
FCFY11.22%
OCF(TTM)17.06
OCFY12.37%
SpS98.63
BVpS56.71
TBVpS50.49
PEG (NY)N/A
PEG (5Y)3.11
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
WACC8.25%
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 2Y3.4%
EPS Next 3Y4.43%
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 2Y2.67%
Revenue Next 3Y3.14%
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 14.13 and the Price/Book (PB) ratio is 2.43.
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.