American Financial Group, Inc.
American Financial Group, Inc. Fundamental Analysis
American Financial Group, Inc. (AFG) shows moderate financial fundamentals with a PE ratio of 12.89, profit margin of 10.34%, and ROE of 18.25%. The company generates $8.1B in annual revenue with moderate year-over-year growth of 7.12%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 62.0/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze AFG's fundamental strength across five key dimensions:
Efficiency Score
WeakAFG struggles to generate sufficient returns from assets.
Valuation Score
ModerateAFG shows balanced valuation metrics.
Growth Score
ModerateAFG shows steady but slowing expansion.
Financial Health Score
ModerateAFG shows balanced financial health with some risks.
Profitability Score
ModerateAFG maintains healthy but balanced margins.
Key Financial Metrics
Is AFG Expensive or Cheap?
P/E Ratio
AFG trades at 12.89 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, AFG's PEG of 2.32 indicates potential overvaluation.
Price to Book
The market values American Financial Group, Inc. at 2.25 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 21.50 times EBITDA. This signals the market has high growth expectations.
How Well Does AFG Make Money?
Net Profit Margin
For every $100 in sales, American Financial Group, Inc. keeps $10.34 as profit after all expenses.
Operating Margin
Core operations generate 13.18 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.25 in profit for every $100 of shareholder equity.
ROA
American Financial Group, Inc. generates $2.58 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
American Financial Group, Inc. generates limited operating cash flow of $745.46M, signaling weaker underlying cash strength.
Free Cash Flow
American Financial Group, Inc. produces free cash flow of $704.65M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $8.45 in free cash annually.
FCF Yield
AFG converts 6.54% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.32
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.25
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.33
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.38
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.00
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.18
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.03
vs 25 benchmark
How AFG Stacks Against Its Sector Peers
| Metric | AFG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.89 | 18.86 | Better (Cheaper) |
| ROE | 18.25% | 847.00% | Weak |
| Net Margin | 10.34% | 4202.00% | Weak |
| Debt/Equity | 0.38 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 0.00 | 667.17 | Weak Liquidity |
| ROA | 2.58% | -21543.00% (disorted) | Weak |
AFG outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews American Financial Group, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.68%
Industry Style: Value, Dividend, Cyclical
GrowingEPS CAGR
5.96%
Industry Style: Value, Dividend, Cyclical
GrowingFCF CAGR
-49.74%
Industry Style: Value, Dividend, Cyclical
Declining