American Financial Group (AFG) AI Stock Analysis

• Market Cap: $11.44B
• Dividend Yield: 6.56%
• Average Volume (3M): 457.30K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 0.55
• Revenue Growth: 3.35%
• EPS Growth: -14.16%
• Country: US
• Employees: 8,700
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Property & Casualty
• EPS (TTM): 2.14
• Shares Outstanding: 83,394,480
• 10 Day Avg. Volume: 476,002
• 30 Day Avg. Volume: 457,301
• PEG Ratio: 2.55
• Price to Book (P/B): 2.57
• Price to Sales (P/S): 1.39
• P/FCF Ratio: 9.97
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 1.48
• Enterprise Value/Gross Profit: 2.89
• Enterprise Value/Ebitda: 10.96
• 1Y Price Target: $133.00
• Price Target Upside: -5.09% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 78 Outperform
• Price Target: $157.00 ▲(12.03% Upside)

American Financial Group's stock score is driven by strong financial performance and technical indicators, supported by a reasonable valuation. The earnings call presents a mixed outlook with both strengths and challenges. The company's attractive dividend yield and stable financials are significant positives, while profitability concerns and cautious earnings guidance temper the overall score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for AFG's products and services, enhancing its market position and providing a solid foundation for future expansion.

Stable Balance Sheet

A stable balance sheet with manageable leverage supports financial flexibility, enabling AFG to invest in growth opportunities and weather economic downturns.

Premium Growth

Premium growth in the Specialty P&C segment reflects strong underwriting performance and effective risk management, contributing to sustained revenue streams.

Negative Factors

Decreased Core Net Operating Earnings

A decline in core net operating earnings suggests potential challenges in maintaining profitability, which could impact long-term financial performance.

Lower Returns on Alternative Investments

Reduced returns on alternative investments may limit AFG's overall investment income, affecting its ability to generate cash and support growth initiatives.

Challenges in Nonprofit and Social Services

Challenges in the social services sector could hinder AFG's ability to maintain market share and profitability in this niche, impacting future growth prospects.

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 its insurance underwriting operations, where it earns premiums from policyholders in its specialty property and casualty insurance segment. The company also collects investment income from its sizable investment portfolio, which includes bonds, stocks, and real estate investments. Additionally, AFG earns fees and commissions from the sale of annuities and life insurance products. Key revenue streams include the underwriting profit from insurance premiums minus claims and expenses, as well as returns from invested assets. The company's strategic partnerships with various distribution channels, including independent agents and brokers, further enhance its market reach and revenue generation capabilities.

American Financial Group Financial Statement Overview

Summary

American Financial Group demonstrates strong revenue growth and a stable balance sheet, but faces challenges in profitability and cash conversion. The company's financials reflect a solid foundation with opportunities for enhancing operational efficiency and cash flow management.

Income Statement

American Financial Group has shown strong revenue growth, particularly in the TTM period with a 46.1% increase. The gross profit margin remains healthy, although the net profit margin has slightly decreased in the TTM. The EBIT margin has turned negative in the TTM, indicating potential operational challenges. Overall, the income statement reflects strong revenue growth but with some profitability concerns.

Balance Sheet

The company's balance sheet is stable with a moderate debt-to-equity ratio of 0.33 in the TTM, indicating a balanced approach to leverage. The return on equity remains strong, although it has slightly decreased compared to previous years. The equity ratio is healthy, suggesting a solid capital structure. Overall, the balance sheet reflects financial stability with manageable leverage.

Cash Flow

The cash flow statement shows a positive free cash flow growth rate of 21.9% in the TTM, indicating improved cash generation. However, the operating cash flow to net income ratio is low, suggesting potential issues in converting income to cash. The free cash flow to net income ratio is strong, reflecting efficient cash management. Overall, the cash flow statement indicates good cash generation with some areas for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.28B	8.28B	7.73B	6.77B	6.23B	5.65B
Gross Profit	4.23B	3.82B	7.45B	3.14B	3.07B	5.58B
EBITDA	1.11B	1.28B	1.23B	1.31B	1.62B	726.00M
Net Income	764.00M	887.00M	852.00M	898.00M	2.00B	732.00M
Balance Sheet
Total Assets	30.67B	30.84B	29.79B	28.83B	28.94B	73.57B
Cash, Cash Equivalents and Short-Term Investments	2.00B	1.95B	1.75B	10.97B	12.49B	10.75B
Total Debt	1.48B	1.48B	1.67B	1.61B	1.96B	1.96B
Total Liabilities	26.15B	26.37B	25.53B	24.78B	23.93B	66.78B
Stockholders Equity	4.52B	4.47B	4.26B	4.05B	5.01B	6.79B
Cash Flow
Free Cash Flow	1.74B	1.15B	1.90B	1.07B	1.56B	1.84B
Operating Cash Flow	1.67B	1.15B	1.97B	1.15B	1.71B	2.18B
Investing Cash Flow	160.00M	95.00M	414.00M	-1.05B	-436.00M	-1.56B
Financing Cash Flow	-1.68B	-1.07B	-2.03B	-1.36B	-1.96B	-123.00M

American Financial Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 140.14
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFG, the sentiment is Positive. The current price of 140.14 is above the 20-day moving average (MA) of 135.62, above the 50-day MA of 130.16, and above the 200-day MA of 127.80, indicating a bullish trend. The MACD of 2.66 indicates Negative momentum. The RSI at 66.39 is Neutral, neither overbought nor oversold. The STOCH value of 73.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AFG.

American Financial Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THG	79 Outperform	$6.51B	11.73	19.23%	1.98%	4.47%	102.98%
AFG	78 Outperform	$11.44B	15.05	17.17%	6.56%	3.35%	-14.16%
RLI	76 Outperform	$6.08B	18.95	19.49%	3.91%	10.29%	-4.70%
SIGI	75 Outperform	$4.75B	12.77	12.19%	1.95%	12.27%	66.53%
KNSL	74 Outperform	$9.92B	22.22	29.98%	0.15%	21.51%	20.03%
CNA	68 Neutral	$12.96B	14.72	8.54%	7.98%	6.12%	-31.43%
Sector *	68 Neutral	$18.10B	11.52	9.93%	3.73%	9.70%	1.14%

American Financial Group Corporate Events

American Financial Group Halts Charleston Resort Sale Plans

On June 6, 2025, American Financial Group announced the termination of agreements to sell the Charleston Harbor Resort & Marina, a premier property in Charleston, South Carolina. The company will continue to explore strategic alternatives for the resort, which includes two hotels, a marina, and other amenities. This decision could impact AFG’s operations and market positioning as they reassess their strategy for this asset.