American Funds American Balanced Fund
American Funds American Balanced Fund Fundamental Analysis
American Funds American Balanced Fund (AFMBX) shows weak financial fundamentals with a PE ratio of 4282.81, profit margin of 7.31%, and ROE of 12.67%. The company generates $0.9B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 60.0/100 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 AFMBX's fundamental strength across five key dimensions:
Efficiency Score
WeakAFMBX struggles to generate sufficient returns from assets.
Valuation Score
WeakAFMBX trades at a premium to fair value.
Growth Score
ModerateAFMBX shows steady but slowing expansion.
Financial Health Score
ExcellentAFMBX maintains a strong and stable balance sheet.
Profitability Score
WeakAFMBX struggles to sustain strong margins.
Key Financial Metrics
Is AFMBX Expensive or Cheap?
P/E Ratio
AFMBX trades at 4282.81 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, AFMBX's PEG of 42.83 indicates potential overvaluation.
Price to Book
The market values American Funds American Balanced Fund at 507.81 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 3183.88 times EBITDA. This signals the market has high growth expectations.
How Well Does AFMBX Make Money?
Net Profit Margin
For every $100 in sales, American Funds American Balanced Fund keeps $7.31 as profit after all expenses.
Operating Margin
Core operations generate 8.26 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.67 in profit for every $100 of shareholder equity.
ROA
American Funds American Balanced Fund generates $9.17 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
American Funds American Balanced Fund produces operating cash flow of $135.15M, showing steady but balanced cash generation.
Free Cash Flow
American Funds American Balanced Fund generates strong free cash flow of $95.37M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.01 in free cash annually.
FCF Yield
AFMBX converts 0.03% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
4282.81
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
42.83
vs 25 benchmark
P/B Ratio
Price to book value ratio
507.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
330.72
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
6.82
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.09
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How AFMBX Stacks Against Its Sector Peers
| Metric | AFMBX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 4282.81 | 18.86 | Worse (Expensive) |
| ROE | 12.67% | 847.00% | Weak |
| Net Margin | 7.31% | 4202.00% | Weak |
| Debt/Equity | 0.02 | 0.91 | Strong (Low Leverage) |
| Current Ratio | 6.82 | 667.17 | Strong Liquidity |
| ROA | 9.17% | -21543.00% (disorted) | Weak |
AFMBX outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews American Funds American Balanced Fund's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Value, Dividend, Cyclical
EPS CAGR
N/A
Industry Style: Value, Dividend, Cyclical
FCF CAGR
N/A
Industry Style: Value, Dividend, Cyclical