AMERICAN FINANCIAL GROUP INC (AFG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFG - US0259321042 - Common Stock
137.46 USD
-0.48 (-0.35%)
137.46 USD
0 (0%)
Taking everything into account, AFG scores 5 out of 10 in our fundamental rating. AFG was compared to 147 industry peers in the Insurance industry. AFG has an excellent financial health rating, but there are some minor concerns on its profitability. While showing a medium growth rate, AFG is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
AFG had positive earnings in the past year.
AFG had a positive operating cash flow in the past year.
In the past 5 years AFG has always been profitable.
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 53.74% of the companies in the same industry.
AFG has a Return On Equity of 16.87%. This is in the better half of the industry: AFG outperforms 73.47% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.38%, AFG is in line with its industry, outperforming 50.34% 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 significantly below the industry average of 14.89%.
| 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
The Profit Margin of AFG (9.70%) is comparable to the rest of the 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 of 12.28%. This is comparable to the rest of the industry: AFG outperforms 46.94% 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
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.
The number of shares outstanding for AFG has been reduced compared to 5 years ago.
The debt/assets ratio for AFG has been reduced compared to a year ago.
2.2 Solvency
AFG has an Altman-Z score of 0.78. 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 0.78. This is in the better half of the industry: AFG outperforms 76.87% 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 (1.41) which is in line with its industry peers.
A Debt/Equity ratio of 0.38 indicates that AFG is not too dependend on debt financing.
The Debt to Equity ratio of AFG (0.38) is worse than 61.22% 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.
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.
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.
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
The earnings per share for AFG have decreased by -6.78% in the last year.
AFG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.54% yearly.
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
The Earnings Per Share is expected to grow by 4.43% 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 3.14% 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.
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
AFG is valuated correctly with a Price/Earnings ratio of 14.08.
Compared to the rest of the industry, the Price/Earnings ratio of AFG is on the same level as its industry peers.
AFG's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.38.
A Price/Forward Earnings ratio of 11.96 indicates a reasonable valuation of AFG.
The rest of the industry has a similar Price/Forward Earnings ratio as AFG.
The average S&P500 Price/Forward Earnings ratio is at 23.83. AFG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.08 | ||
| Fwd PE | 11.96 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AFG is on the same level as its industry peers.
AFG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.88 | ||
| EV/EBITDA | 10.49 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)3.1
EPS Next 2Y3.4%
EPS Next 3Y4.43%
5. Dividend
5.1 Amount
AFG has a Yearly Dividend Yield of 2.59%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.64, AFG pays a bit more dividend than its industry peers.
AFG's Dividend Yield is a higher than the S&P500 average which is at 1.87.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
5.2 History
The dividend of AFG is nicely growing with an annual growth rate of 13.64%!
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)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 2Y3.4%
EPS Next 3Y4.43%
137.46
-0.48 (-0.35%)
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 Cap11.46B
Revenue(TTM)8.23B
Net Income(TTM)798.00M
Analysts72
Price Target142.39 (3.59%)
Short Float %1.83%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
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)1.27%
EPS NQ rev (3m)1.65%
EPS NY rev (1m)2.6%
EPS NY rev (3m)5.61%
Revenue NQ rev (1m)-1.46%
Revenue NQ rev (3m)-2.61%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.08 | ||
| Fwd PE | 11.96 | ||
| P/S | 1.39 | ||
| P/FCF | 8.88 | ||
| P/OCF | 8.06 | ||
| P/B | 2.42 | ||
| P/tB | 2.72 | ||
| EV/EBITDA | 10.49 |
EPS(TTM)9.76
EY7.1%
EPS(NY)11.49
Fwd EY8.36%
FCF(TTM)15.48
FCFY11.26%
OCF(TTM)17.06
OCFY12.41%
SpS98.63
BVpS56.71
TBVpS50.49
PEG (NY)N/A
PEG (5Y)3.1
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 14.08 and the Price/Book (PB) ratio is 2.42.
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.