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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
American Financial Group, Inc. (XNYS:AFG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AFG
Name:
AMERICAN FINANCIAL GROUP, INC. (XNYS:AFG)
Sector:
480.00M
Industry:
Insurance�Property & Casualty
CEO:
Mr. Carl Lindner
Total Employees:
6,600
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AMERICAN FINANCIAL GROUP, INC.(AFG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�PROPERTY & CASUALTY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
127.22
One Month Price Target:
$127.8
Six Month Price Target :
$130.69
Likely Price in One Year's Time:
Ticker:
$134.15
Likely Trading Range Today Under (Normal Volatility)
$126.64
Price Upper limit ($) :
$127.98
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$119.21
This week:
$109.32
This month :
$91.42
Other Primary facts
Market Cap:
10.75B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
85.16M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.29%
-26.29%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$164.36
$147.28
$90.08
$107.16
Medium risk (<10%) entry points
Buy Call
Sell Call
$141.72
Buy Put:
Sell Put:
$138.07
$112.68
$116.37
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AFG
Sharpe Ratio:
1.97%
Comparison:
AFG, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 42.74% higher than the industry
& is -13.41% lower than the market/S&P 500 average
Average Returns/Yield of
AFG
Daily returns:
0.07%
Weekly returns:
0.35%
Monthly returns:
1.40%
Yearly returns:
10.43%
Comparison of returns:
Average annual returns/yield (last 3 years) is 61.11% above industry average
Classification:
AFG, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.29
Statistical test of Returns:
AFG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.10%
Weekly Volatility:
6.93%
Monthly Volatility:
13.85%
Yearly Volatility:
47.99%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.97%
Volatility in last five trading days has been -68.57% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.29%
Weekly VaR:
-14.07%
Monthly VaR:
-28.14%
How Much Can the price of
AFG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$96.58
This translates to price declining to:
$19.08
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AFG is a 98.61% riskier investment compared to the market/S&P 500 & is 70.15% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 28.66% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AFG
Beta in relation to market/S&P 500--0.81
Expected beta in 1 year's time:
0.593
Expected beta in 3 year's time:
0.839
Unlevered (debt free) Beta:
0.457
Beta in relation to Nasdaq (XNAS):
0.832
Beta in relation to all global stocks::
1.032
Beta Comparison & Analysis
Beta of competitors/peers::
0.997
Beta is -18.67% lower than peers
Average Industry Beta:
0.555
Beta is 46.10% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.081
Alpha is 132.98% above industry average alpha yield
Alpha is 515% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AFG
Equity cost of capital:
0.087
Equity cost of capital is 25.21% above industry mean WACC
Unlevered (without debt) cost of capital:
4.90%
Before-tax cost of debt:
1.51%
After-tax cost of debt:
1.20%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.20%
WACC is 21.15% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$77.03
Revenue growth rate per share of (3Y):
2.87
Annual revenue growth rate is -105.92% below industry average
EPS:
$21.86
Expected Annual growth rate of EPS (3Y):
8.34%
Expected future EPS growth rate is -46.63% lower than the Insurance�Property & Casualty industry
Free cash flow (FCF) per share:
$17.25
Balance sheet equity growth per share: 523.10%
Equity growth rate per share is 1056.68% higher than the industry
Debt per share
$54.28
EBITDA per share
$26.38
Valuation Analysis Today of
AFG
P/E Ratio:
10.51
P/E Ratio of Competitors/Peers:
13.94
P/E ratio is -24.61% lower than main peers & is -39.95% lower than the industry
Stock price/value with industry average P/E ratio: $382.48
AFG is -66.74% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.65
Price to sales ratio is -31.14% below the industry mean
P/B (Price to book value ratio):
2.87
Price to free cash flow: 7.37
Price to free cash flow ratio is -63.67% lower than the industry
Net income growth rate (3Y):
289.26%
Net income growth rate is -1091.09% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.96%
Dividend yeild: 8.74%
Previous Dividend: $8.00
Previous adjusted dividend: $8.00
Previous Dividend: $11.12
Expected next dividend best case: $9.88
Expected next dividend worst case: $6.12
Average dividend payment (long-term): $2.38
Average dividend increase/decrease (growth rate) % per period: 202.14%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 18/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 20/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-19--$8.00
2022-03-14--$2.00
2021-12-23--$2.00
2022-04-13--$0.56
2022-01-13--$0.56
2021-12-22--$2.00
Dividend growth rate is 338.63% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
95.62%
Net debt to equity ratio:
53.01%
Debt to assets ratio:
9.38%
Net debt to assets ratio:
5.20%
Debt-to-asset ratio is -85.90% below industry average
Ability to repay debt:
Interest coverage ratio:
32.1
Interest coverage ratio is 566.61% more than industry average
Looking forward:
Debt growth rate:
-72.62%
Annual debt growth is 3128% higher than industry average debt growth rate
Debt repayment rate in last quarter: 1.05%
Analysis of Key Statistics
Correlation of price movement with the market:
0.644
Statistical significance of correlation:
AFG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.6
Stock price is 7.24% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.6
Correlation of price movement with Nasdaq (^IXIC):
0.043
Covariance of price movement with the market:
0.078
Kurtosis
19.686
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.6
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
AFG
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
4.42%
Operating profit margin is -169.87% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
18.88%
Effective tax rate is -5.52% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
37.35%
Return on equity (ROE) is 358.77% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.66%
Return on assets (ROA) is 139.10% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
-
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
993.9K
Each employee generates -17% less revenue than industry average revenue per employee
EBITDA generated per employee:
340.5K
Each employee generates 69% more EBITDA than industry average revenue per employee
Profit generated per employee:
273.6K
Each employee generates 94% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
72.7K
Each employee generates 20% more free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates 20% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AFG
INVESCO LTD. (XNYS:IVZ)
Aegon NV (XNYS:AEG)
EVEREST RE GROUP, LTD. (XNYS:RE)
CNA FINANCIAL CORPORATION (XNYS:CNA)
CREDICORP LTD. (XNYS:BAP)
COMERICA INCORPORATED (XNYS:CMA)
SANTANDER CONSUMER USA HOLDINGS INC. (XNYS:SC)
ARES MANAGEMENT CORPORATION (XNYS:ARES)
APO-PA
Current Analyst Ratings
Strong buy�8%
Buy�8%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
6.56B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
-
-
-
-
-
7.00M
70.00M
114.00M
2.25B
290.00M
1.81B
1.36B
257.00M
1.81B
Statement of Cash Flow
Date:
Period:
26.00M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
187.00M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
503.00M
Investments in PP&E:
- 23000.00K
Net Acquisitions:
-
Purchases of Investments:
- 358000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.06B
38.32B
40.38B
-
-
- 24663000.00K
15.72B
-
-
-
-
-
-
-
33.56B
49.28B
-
-
-
-
-
-
4.62B
-
4.62B
50.13B
45.50B
2.84B
3.54B
- 131000.0K
-
March 31, 2022 at 6:00:00 AM
5.20B
4.84B
50.34B
-
4.62B
2.6B
276.00M
120.00M
15.00M
- 49000.00K
5.00M
- 5000.00K
- 216000.00K
- 77000.00K
- 342000.00K
-
- 950000.00K
1.18B
2.13B
503.00M
- 23000.00K
480.00M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
AFG
2023
2024
2025
2026
2027
$134.82
$241.02
$254.16
$268.01
$282.61