AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFG - US0259321042 - Common Stock
133.06 USD
+0.25 (+0.19%)
133.06 USD
0 (0%)
AFG gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 147 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 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.
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's Return On Assets of 2.36% is in line compared to the rest of the industry. AFG outperforms 52.38% of its industry peers.
The Return On Equity of AFG (16.87%) is better than 73.47% of its industry peers.
AFG has a Return On Invested Capital of 2.38%. This is comparable to the rest of the industry: AFG outperforms 50.34% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AFG is significantly below the industry average of 14.90%.
| 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 56.46% of the companies in the same industry.
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 comparable to the rest of the industry.
In the last couple of years the Operating Margin of AFG has declined.
| 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
AFG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AFG has been increased compared to 1 year ago.
Compared to 5 years ago, AFG has less shares outstanding
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.
The Altman-Z score of AFG (0.77) is better than 75.51% 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.
AFG's Debt to FCF ratio of 1.41 is in line compared to the rest of the industry. AFG outperforms 57.14% 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: 61.22% 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
WACC8.25%
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.
Looking at the Current ratio, with a value of 9.26, AFG belongs to the top of the industry, outperforming 96.60% 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.
The Quick ratio of AFG (9.26) is better than 96.60% 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.
Looking at the last year, AFG shows a small growth in Revenue. The Revenue has grown by 0.13% in the last year.
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 4.43% on average over the next years.
The Revenue is expected to grow by 3.14% on average over the next years.
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
With a Price/Earnings ratio of 13.63, AFG is valued correctly.
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 26.59, which is the current average of the S&P500 Index.
AFG is valuated reasonably with a Price/Forward Earnings ratio of 11.58.
The rest of the industry has a similar Price/Forward Earnings ratio as AFG.
AFG is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.80, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 11.58 |
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 | 8.6 | ||
| EV/EBITDA | 10.1 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3
EPS Next 2Y3.4%
EPS Next 3Y4.43%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 2.64%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.48, AFG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.31, 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
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 2Y3.4%
EPS Next 3Y4.43%
133.06
+0.25 (+0.19%)
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 Cap11.10B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target142.39 (7.01%)
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)1.6%
PT rev (3m)6.89%
EPS NQ rev (1m)1.27%
EPS NQ rev (3m)1.9%
EPS NY rev (1m)2.6%
EPS NY rev (3m)5.61%
Revenue NQ rev (1m)-1.46%
Revenue NQ rev (3m)-4.35%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.63 | ||
| Fwd PE | 11.58 | ||
| P/S | 1.35 | ||
| P/FCF | 8.6 | ||
| P/OCF | 7.8 | ||
| P/B | 2.35 | ||
| P/tB | 2.64 | ||
| EV/EBITDA | 10.1 |
EPS(TTM)9.76
EY7.34%
EPS(NY)11.49
Fwd EY8.64%
FCF(TTM)15.48
FCFY11.63%
OCF(TTM)17.06
OCFY12.82%
SpS98.63
BVpS56.71
TBVpS50.49
PEG (NY)N/A
PEG (5Y)3
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
WACC8.25%
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 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 13.63 and the Price/Book (PB) ratio is 2.35.
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.