AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - NYSE:AFG - US0259321042 - Common Stock
142.44 USD
-0.75 (-0.52%)
142.44 USD
0 (0%)
Taking everything into account, AFG scores 5 out of 10 in our fundamental rating. AFG was compared to 146 industry peers in the Insurance industry. AFG has an excellent financial health rating, but there are some minor concerns on its profitability. 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.
AFG had positive earnings in each of the past 5 years.
In the past 5 years AFG always reported a positive cash flow from operatings.
1.2 Ratios
With a Return On Assets value of 2.36%, AFG perfoms like the industry average, outperforming 52.74% of the companies in the same industry.
AFG has a better Return On Equity (16.87%) than 76.71% of its industry peers.
The Return On Invested Capital of AFG (2.38%) is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for AFG is in line with the industry average of 4.51%.
| 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 fine compared to the rest of the industry. AFG outperforms 60.27% of its industry peers.
AFG's Profit Margin has been stable in the last couple of years.
AFG's Operating Margin of 12.28% is in line compared to the rest of the industry. AFG outperforms 50.00% of 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
Compared to 5 years ago, AFG has less shares outstanding
AFG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.79, we must say that AFG is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of AFG (0.79) is better than 76.03% 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 has a Debt to FCF ratio of 1.41. This is comparable to the rest of the industry: AFG outperforms 58.90% of its industry peers.
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 60.96% 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 | 0.79 |
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's Current ratio of 9.26 is amongst the best of the industry. AFG outperforms 96.58% of its industry peers.
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 96.58% 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.
The Revenue has been growing slightly by 0.13% in the past 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
Based on estimates for the next years, AFG will show a small growth in Earnings Per Share. The EPS will grow by 4.58% on average per year.
Based on estimates for the next years, AFG will show a small growth in Revenue. The Revenue will grow by 3.31% on average per year.
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
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
AFG is valuated correctly with a Price/Earnings ratio of 14.59.
The rest of the industry has a similar Price/Earnings ratio as AFG.
The average S&P500 Price/Earnings ratio is at 25.89. AFG is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 12.24 indicates a correct valuation of AFG.
The rest of the industry has a similar Price/Forward Earnings ratio as AFG.
AFG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.59.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.59 | ||
| Fwd PE | 12.24 |
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 | 9.2 | ||
| EV/EBITDA | 10.88 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.21
EPS Next 2Y4.04%
EPS Next 3Y4.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.46%, AFG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.47, AFG pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, AFG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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.
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%
142.44
-0.75 (-0.52%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners67.24%
Inst Owner Change-1.16%
Ins Owners17.97%
Ins Owner Change1.15%
Market Cap11.88B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target140.15 (-1.61%)
Short Float %2.27%
Short Ratio3.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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)3.62%
PT rev (3m)4.25%
EPS NQ rev (1m)8.94%
EPS NQ rev (3m)-12.68%
EPS NY rev (1m)2.49%
EPS NY rev (3m)-3.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.59 | ||
| Fwd PE | 12.24 | ||
| P/S | 1.44 | ||
| P/FCF | 9.2 | ||
| P/OCF | 8.35 | ||
| P/B | 2.51 | ||
| P/tB | 2.82 | ||
| EV/EBITDA | 10.88 |
EPS(TTM)9.76
EY6.85%
EPS(NY)11.64
Fwd EY8.17%
FCF(TTM)15.48
FCFY10.87%
OCF(TTM)17.06
OCFY11.98%
SpS98.64
BVpS56.72
TBVpS50.5
PEG (NY)N/A
PEG (5Y)3.21
Graham Number111.61
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 | 0.79 |
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-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 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 14.59 and the Price/Book (PB) ratio is 2.51.
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.