American Financial Group (AFG) AI Stock Analysis

• Market Cap: $10.22B
• Dividend Yield: 7.37%
• Average Volume (3M): 476.80K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.56
• Revenue Growth: 3.76%
• EPS Growth: -9.12%
• Country: US
• Employees: 8,700
• Sector: Financial
• Sector Strength: 73
• Industry: Insurance - Property & Casualty
• EPS (TTM): 1.81
• Shares Outstanding: 83,517,980
• 10 Day Avg. Volume: 415,566
• 30 Day Avg. Volume: 476,797
• PEG Ratio: -1.32
• Price to Book (P/B): 2.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.32
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 0.43
• Enterprise Value/Gross Profit: 1.76
• Enterprise Value/Ebitda: 3.53
• 1Y Price Target: $132.50
• Price Target Upside: 8.23% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 66 Neutral
• Price Target: $132.00 ▲(7.83%Upside)

American Financial Group's strong revenue growth and stable financial position are tempered by recent declines in operational efficiency and free cash flow. Technical indicators suggest potential downward pressure on the stock, while valuation metrics indicate possible undervaluation. The earnings call reflected mixed sentiments with strong shareholder returns but highlighted challenges in underwriting and investment returns. Overall, the stock presents a balanced risk-reward profile.

American Financial Group Business Overview & Revenue Model

Company Description

American Financial Group, Inc., an insurance holding company, provides specialty property and casualty insurance products in the United States. It offers property and transportation insurance products, such as physical damage and liability coverage for buses and trucks, inland and ocean marine, agricultural-related products, and other commercial property and specialty transportation coverages; specialty casualty insurance, including primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability, and specialty coverage in targeted markets, as well as customized programs for small to mid-sized businesses and workers' compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, fidelity and surety products, and trade credit insurance. The company sells its property and casualty insurance products through independent insurance agents and brokers. American Financial Group, Inc. was founded in 1872 and is headquartered in Cincinnati, Ohio.

How the Company Makes Money

American Financial Group generates revenue primarily through the underwriting and sale of insurance policies within its Property and Casualty Insurance and Annuity segments. In the Property and Casualty Insurance segment, AFG earns premiums from policyholders in exchange for coverage against various risks. The company also invests the premiums collected, generating additional income through returns on its investment portfolio. In the Annuity segment, AFG earns money from the sale of fixed and indexed annuities, managing the invested assets to meet future payout obligations while generating investment income. Key factors contributing to AFG's earnings include effective risk assessment, pricing strategies, and a diversified portfolio that mitigates exposure to market fluctuations.

American Financial Group Financial Statement Overview

Summary

American Financial Group shows strong revenue growth and effective cash flow management. However, recent declines in operational efficiency and free cash flow suggest areas of concern. The balance sheet remains stable with conservative debt usage and effective equity utilization.

Income Statement

American Financial Group shows a solid growth trajectory with a consistent increase in total revenue from $6.55 billion in 2021 to $8.32 billion in 2024. The net profit margin has improved over the years, reaching 10.65% in 2024. However, the decline in EBIT and EBITDA margins in 2024 indicates a possible challenge in maintaining operational efficiency.

Balance Sheet

The company's balance sheet is stable with a healthy debt-to-equity ratio of 0.33 in 2024, reflecting a conservative leverage position. The equity ratio has slightly decreased over time, reaching 14.48% in 2024, indicating moderate reliance on liabilities. Return on equity is strong at 19.86%, showcasing effective use of shareholders' equity.

Cash Flow

American Financial Group maintains a robust cash flow position with significant operating cash flow of $1.15 billion in 2024. The free cash flow remains strong, and the operating cash flow to net income ratio is favorable at 1.30, indicating effective cash generation from operations. However, a declining trend in free cash flow compared to previous years suggests potential challenges in maintaining cash generation levels.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	29.00M	7.73B	7.04B	6.55B	7.91B
Gross Profit	0.00	7.73B	7.04B	6.55B	7.91B
EBITDA	1.20B	1.23B	1.31B	1.62B	726.00M
Net Income	887.00M	852.00M	898.00M	1.08B	732.00M
Balance Sheet
Total Assets	30.84B	29.79B	28.83B	28.94B	73.57B
Cash, Cash Equivalents and Short-Term Investments	1.41B	1.75B	10.97B	12.49B	46.02B
Total Debt	1.48B	1.48B	1.50B	1.96B	1.96B
Total Liabilities	26.37B	25.53B	24.78B	23.93B	66.78B
Stockholders Equity	4.47B	4.26B	4.05B	5.01B	6.79B
Cash Flow
Free Cash Flow	1.15B	1.97B	1.07B	1.56B	1.84B
Operating Cash Flow	1.15B	1.97B	1.15B	1.71B	2.18B
Investing Cash Flow	95.00M	414.00M	-1.05B	-436.00M	-1.56B
Financing Cash Flow	-1.07B	-2.03B	-1.36B	-1.96B	-123.00M

American Financial Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 122.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFG, the sentiment is Negative. The current price of 122.42 is below the 20-day moving average (MA) of 125.94, below the 50-day MA of 124.38, and below the 200-day MA of 126.91, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 41.91 is Neutral, neither overbought nor oversold. The STOCH value of 14.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFG.

American Financial Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THG	81 Outperform	$6.16B	11.30	19.23%	2.10%	4.47%	102.98%
KNSL	80 Outperform	$10.36B	23.20	29.98%	0.15%	21.51%	20.03%
RLI	74 Outperform	$6.05B	18.85	19.49%	3.95%	10.29%	-4.70%
AXS	70 Outperform	$7.30B	8.85	15.07%	1.89%	6.87%	43.53%
CNA	68 Neutral	$12.00B	13.50	8.98%	8.57%	6.34%	-28.19%
Sector *	67 Neutral	$16.60B	11.20	9.14%	3.93%	10.99%	-3.70%
AFG	66 Neutral	$10.22B	12.86	18.51%	7.37%	3.76%	-9.12%

American Financial Group Corporate Events

American Financial Group Sells Charleston Harbor Resort

On March 31, 2025, American Financial Group announced that its subsidiary reached agreements to sell the Charleston Harbor Resort & Marina in Charleston, South Carolina. The transaction, expected to close in the second or third quarter of 2025, could result in a net after-tax gain of approximately $100 million for AFG, impacting its financial performance positively.

American Financial Group Elects New Board Members

On February 19, 2025, American Financial Group announced the election of Craig Lindner Jr. and David L. Thompson Jr. to its Board of Directors, highlighting their extensive experience in real estate and insurance, respectively. Concurrently, James E. Evans announced his decision not to seek re-election at the 2025 Annual Meeting, although he will continue to serve as an Executive Consultant, ensuring a seamless transition and continued strategic guidance for the company.