AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
NYSE:AFG - New York Stock Exchange, Inc. - US0259321042 - Common Stock - Currency: USD
Overall AFG gets a fundamental rating of 5 out of 10. We evaluated AFG against 144 industry peers in the Insurance industry. Both the profitability and the financial health of AFG get a neutral evaluation. Nothing too spectacular is happening here. AFG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
AFG had positive earnings in the past year.
In the past year AFG had a positive cash flow from operations.
Each year in the past 5 years AFG has been profitable.
AFG had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
The Return On Assets of AFG (2.75%) is comparable to the rest of the industry.
AFG has a Return On Equity of 19.01%. This is in the better half of the industry: AFG outperforms 78.01% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.66%, AFG is in line with its industry, outperforming 56.74% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.75% | ||
| ROE | 19.01% | ||
| ROIC | 2.66% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a decent Profit Margin value of 10.89%, AFG is doing good in the industry, outperforming 64.54% of the companies in the same industry.
AFG's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 13.23%, AFG is in line with its industry, outperforming 56.74% of the companies in the same industry.
In the last couple of years the Operating Margin of AFG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.23% | ||
| PM (TTM) | 10.89% | ||
| GM | N/A |
OM growth 3Y-12.81%
OM growth 5Y-0.08%
PM growth 3Y-29.55%
PM growth 5Y-0.39%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
AFG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
There is no outstanding debt for AFG. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
AFG has an Altman-Z score of 0.79. 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 0.79. This is in the better half of the industry: AFG outperforms 78.01% of its industry peers.
AFG has a debt to FCF ratio of 1.34. This is a very positive value and a sign of high solvency as it would only need 1.34 years to pay back of all of its debts.
AFG has a Debt to FCF ratio (1.34) which is in line with its industry peers.
A Debt/Equity ratio of 0.31 indicates that AFG is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.31, AFG is in line with its industry, outperforming 48.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.34 | ||
| Altman-Z | 0.79 |
ROIC/WACC0.32
WACC8.4%
2.3 Liquidity
AFG has a Current Ratio of 8.46. This indicates that AFG is financially healthy and has no problem in meeting its short term obligations.
With an excellent Current ratio value of 8.46, AFG belongs to the best of the industry, outperforming 97.16% of the companies in the same industry.
AFG has a Quick Ratio of 8.46. 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 8.46, AFG belongs to the top of the industry, outperforming 97.16% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 8.46 | ||
| Quick Ratio | 8.46 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 1.80% over the past 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 5.63%.
The Revenue has been growing slightly by 0.16% on average over the past years.
EPS 1Y (TTM)1.8%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%9.86%
Revenue 1Y (TTM)5.63%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%6.81%
3.2 Future
AFG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.20% yearly.
The Revenue is expected to grow by 4.19% on average over the next years.
EPS Next Y-1.78%
EPS Next 2Y4.74%
EPS Next 3Y6.2%
EPS Next 5YN/A
Revenue Next Year7.08%
Revenue Next 2Y6.4%
Revenue Next 3Y4.19%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 11.15, which indicates a very decent valuation of AFG.
AFG's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of AFG to the average of the S&P500 Index (29.63), we can say AFG is valued rather cheaply.
AFG is valuated reasonably with a Price/Forward Earnings ratio of 11.35.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AFG is on the same level as its industry peers.
AFG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.15 | ||
| Fwd PE | 11.35 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than AFG, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as AFG.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.13 | ||
| EV/EBITDA | 8.84 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)2.46
EPS Next 2Y4.74%
EPS Next 3Y6.2%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.65%, AFG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.10, AFG pays a bit more dividend than its industry peers.
AFG's Dividend Yield is comparable with the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
The dividend of AFG is nicely growing with an annual growth rate of 12.75%!
AFG has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of AFG decreased recently.
Dividend Growth(5Y)12.75%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
63.80% 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.
DP63.8%
EPS Next 2Y4.74%
EPS Next 3Y6.2%
119.82
-0.97 (-0.8%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners65.31%
Inst Owner Change1.32%
Ins Owners14.5%
Ins Owner Change0%
Market Cap10.06B
Analysts72.73
Price Target140.76 (17.48%)
Short Float %1.32%
Short Ratio2.55
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Yearly Dividend8.11
Dividend Growth(5Y)12.75%
DP63.8%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.87%
Min EPS beat(2)-7.36%
Max EPS beat(2)3.61%
EPS beat(4)2
Avg EPS beat(4)-1.45%
Min EPS beat(4)-7.36%
Max EPS beat(4)3.61%
EPS beat(8)3
Avg EPS beat(8)-2.71%
EPS beat(12)7
Avg EPS beat(12)6.48%
EPS beat(16)11
Avg EPS beat(16)15.71%
Revenue beat(2)1
Avg Revenue beat(2)1.85%
Min Revenue beat(2)-8.22%
Max Revenue beat(2)11.93%
Revenue beat(4)2
Avg Revenue beat(4)-1.04%
Min Revenue beat(4)-10.89%
Max Revenue beat(4)11.93%
Revenue beat(8)4
Avg Revenue beat(8)1.78%
Revenue beat(12)8
Avg Revenue beat(12)6.99%
Revenue beat(16)12
Avg Revenue beat(16)11.45%
PT rev (1m)0%
PT rev (3m)5.23%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.34%
EPS NY rev (1m)-11.79%
EPS NY rev (3m)-12.45%
Revenue NQ rev (1m)-3.45%
Revenue NQ rev (3m)-6.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.32%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.15 | ||
| Fwd PE | 11.35 | ||
| P/S | 1.22 | ||
| P/FCF | 9.13 | ||
| P/OCF | 8.15 | ||
| P/B | 2.14 | ||
| P/tB | 2.39 | ||
| EV/EBITDA | 8.84 |
EPS(TTM)10.75
EY8.97%
EPS(NY)10.56
Fwd EY8.81%
FCF(TTM)13.12
FCFY10.95%
OCF(TTM)14.69
OCFY12.26%
SpS97.82
BVpS56.06
TBVpS50.06
PEG (NY)N/A
PEG (5Y)2.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.75% | ||
| ROE | 19.01% | ||
| ROCE | 3.36% | ||
| ROIC | 2.66% | ||
| ROICexc | 2.77% | ||
| ROICexgc | 3.04% | ||
| OM | 13.23% | ||
| PM (TTM) | 10.89% | ||
| GM | N/A | ||
| FCFM | 13.41% |
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-12.81%
OM growth 5Y-0.08%
PM growth 3Y-29.55%
PM growth 5Y-0.39%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.25
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.31 | ||
| Debt/FCF | 1.34 | ||
| Debt/EBITDA | 1.27 | ||
| Cap/Depr | 169.23% | ||
| Cap/Sales | 1.61% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 105.92% | ||
| Profit Quality | 123.13% | ||
| Current Ratio | 8.46 | ||
| Quick Ratio | 8.46 | ||
| Altman-Z | 0.79 |
F-Score6
WACC8.4%
ROIC/WACC0.32
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)1.8%
EPS 3Y-2.5%
EPS 5Y4.54%
EPS Q2Q%9.86%
EPS Next Y-1.78%
EPS Next 2Y4.74%
EPS Next 3Y6.2%
EPS Next 5YN/A
Revenue 1Y (TTM)5.63%
Revenue growth 3Y8.33%
Revenue growth 5Y0.16%
Sales Q2Q%6.81%
Revenue Next Year7.08%
Revenue Next 2Y6.4%
Revenue Next 3Y4.19%
Revenue Next 5YN/A
EBIT growth 1Y-7.57%
EBIT growth 3Y-5.55%
EBIT growth 5Y0.08%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-13.23%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-6.8%
OCF growth 3YN/A
OCF growth 5YN/A