Fact based stock research
AFG (NYSE:AFG)

US0259321042

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

AFG stock research in summary

afginc.com

ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), AFG (Property & Casualty Insurance, USA) shares have lower financial characteristics compared with similar stocks. Shares of AFG are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on AFG's financial characteristics. As the company AFG's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 48), low growth (Obermatt Growth Rank of 23), and risky financing practices (Obermatt Safety Rank of 23), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	48
Growth Rank	23
Safety Rank	23
Combined Rank	6

Country	USA
Industry	Property & Casualty Insurance
Index	D.J. US Insurance, S&P MIDCAP
Size class	X-Large

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: AFG

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	39	44	48
GROWTH
GROWTH	79	75	33	23
SAFETY
SAFETY	91	23	23	23
SENTIMENT
SENTIMENT	n/a	73	50	^new
360° VIEW
360° VIEW	n/a	81	45	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better AFG is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	39	44	48
GROWTH
GROWTH	79	75	33	23
SAFETY
SAFETY	91	23	23	23
COMBINED
COMBINED	76	6	6	6

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of AFG the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), AFG shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for AFG. Price-to-Profit (also referred to as price-earnings, P/E) is 63 which means that the stock price compared with what market professionals expect for future profits is lower than for 63% of comparable companies, indicating a good value concerning AFG's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 37, which means that the stock price is lower as regards to invested capital than for 37% of comparable investments. On the other hand, Price-to-Sales is less favorable than 65% of alternatives (only 35% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 34% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on AFG's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	25	34	35	35
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	86	56	71	63
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	16	26	31	37
DIVIDEND YIELD
DIVIDEND YIELD	40	51	62	66
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33	39	44	48

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of AFG; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), AFG shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for AFG. Sales Growth has a rank of 42, which means that currently professionals expect the company to grow less than 58% of its competitors. The same is valid for Profit Growth, with a rank of 23, and Capital Growth with 45. In addition, Stock Returns have a below market rank of 42, which means that the stock returns have recently been below 58% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	35	65	74	42
PROFIT GROWTH
PROFIT GROWTH	23	39	24	23
CAPITAL GROWTH
CAPITAL GROWTH	n/a	37	47	45
STOCK RETURNS
STOCK RETURNS	96	99	23	42
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	79	75	33	23

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of AFG.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company AFG has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of AFG is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for AFG. Leverage is at 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Refinancing is at a rank of 51, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Finally, Liquidity is also good at a rank of 63, which means that the company generates more profit to service its debt than 63% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), AFG has a financing structure that is significantly riskier than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with AFG but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	82	40	49	56
REFINANCING
REFINANCING	71	51	51	51
LIQUIDITY
LIQUIDITY	85	20	62	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	91	23	23	23

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of AFG and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	64	66	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	97	40	^new
MARKET PULSE
MARKET PULSE	n/a	28	59	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	73	50	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for AFG.
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