We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Hold American Financial in Your Portfolio?
Read MoreHide Full Article
American Financial Inc. (AFG - Free Report) , a niche player in the property and casualty, and annuity markets, should continue to benefit from strategic acquisitions, better pricing and improved rate environment. This Zacks Rank #3 (Hold) insurer is known for having a combined ratio better that its industry in 26 of the last 28 years.
The Zacks Consensus Estimate for its current-year earnings has moved 0.4% north over the past 30 days.
Shares of American Financial Group have lost 5.1% year to date against the industry’s 0.9% increase.
The stock carries a favorable VGM Score of A. This helps to identify stocks with the most attractive value, best growth rate and solid momentum.
Let’s focus on the factors that make American Financial a good stock to buy for greater returns.
Solid Guidance: Given continued solid operational performance, management expects P&C net premiums written to grow 5-7% in 2018 from 4-8% predicted earlier. Of this, net written premiums at property and transportation group are expected to be flat, ranging between (1%) and 2% in 2018, while the same in specialty casualty group is estimated to grow 9-12%, up from 6-10% expected earlier. Net written premiums in specialty financial group are estimated in the range of 3-6% versus 3-7% estimated earlier.
Management estimates Property and Casualty renewal pricing in 2018 to inch up 1-2%.
Improving Top Line: Top line at American Financial has been witnessing growth over the last several years. The company witnessed 10-year CAGR of 4.5%, owing to impressive inorganic profile, organic growth and improving investment income.
Intelligent Capital Management: American Financial boasts a healthy balance sheet and cash position. These have helped the insurer increase dividend for 13 straight years besides paying special dividend. The company’s dividend yield is 1.6%, better than the industry average of 0.5%. The company also has 4.1 million shares remaining under its authorization.
Return on Equity: American Financial Group’s return on equity — a profitability measure — is 15.4%, better than the industry average of 6.6%. This reflects the company’s efficiency in utilizing its shareholders’ funds.
Growth Projections: The Zacks Consensus Estimate for earnings per share is pegged at $8.60 for 2018 and at $8.62 for 2019. The consensus mark for 2018 indicates a year-over-year increase of 31.3% while the same for 2019 indicates 0.2% rise.
The expected long-term earnings growth rate is pegged at 12.5%, higher than the industry average of 10.6%.
Growth Score: The stock carries a Growth Score of B. Growth Score analyzes the growth prospects of a company.
Positive Earnings Surprise History: American Financial Group surpassed the Zacks Consensus Estimate in the last eight quarters with the average beat being 22.55%, reflecting its operational efficiencies.
Stocks to Consider
Some better-ranked property and casualty insurers are Berkshire Hathaway Inc. (BRK.B - Free Report) , Mercury General Corp. (MCY - Free Report) and Atlas Financial Holdings, Inc. .
Berkshire Hathaway engages in insurance, freight rail transportation and utility businesses. It came up with a beat of 11.60% in the previously reported quarter. It sports a Zacks Rank #1 (Strong Buy). YYou can see the complete list of today’s Zacks #1 Rank stocks here.
Mercury General engages in writing personal automobile insurance in the United States. It came up with a beat of 85.00% in the previously reported quarter. It sports a Zacks Rank #1.
Atlas Financial engages in underwriting commercial automobile insurance policies in the United States. It carries a Zacks Rank #2 (Buy).
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Should You Hold American Financial in Your Portfolio?
American Financial Inc. (AFG - Free Report) , a niche player in the property and casualty, and annuity markets, should continue to benefit from strategic acquisitions, better pricing and improved rate environment. This Zacks Rank #3 (Hold) insurer is known for having a combined ratio better that its industry in 26 of the last 28 years.
The Zacks Consensus Estimate for its current-year earnings has moved 0.4% north over the past 30 days.
Shares of American Financial Group have lost 5.1% year to date against the industry’s 0.9% increase.
The stock carries a favorable VGM Score of A. This helps to identify stocks with the most attractive value, best growth rate and solid momentum.
Let’s focus on the factors that make American Financial a good stock to buy for greater returns.
Solid Guidance: Given continued solid operational performance, management expects P&C net premiums written to grow 5-7% in 2018 from 4-8% predicted earlier. Of this, net written premiums at property and transportation group are expected to be flat, ranging between (1%) and 2% in 2018, while the same in specialty casualty group is estimated to grow 9-12%, up from 6-10% expected earlier. Net written premiums in specialty financial group are estimated in the range of 3-6% versus 3-7% estimated earlier.
Management estimates Property and Casualty renewal pricing in 2018 to inch up 1-2%.
Improving Top Line: Top line at American Financial has been witnessing growth over the last several years. The company witnessed 10-year CAGR of 4.5%, owing to impressive inorganic profile, organic growth and improving investment income.
Intelligent Capital Management: American Financial boasts a healthy balance sheet and cash position. These have helped the insurer increase dividend for 13 straight years besides paying special dividend. The company’s dividend yield is 1.6%, better than the industry average of 0.5%. The company also has 4.1 million shares remaining under its authorization.
Return on Equity: American Financial Group’s return on equity — a profitability measure — is 15.4%, better than the industry average of 6.6%. This reflects the company’s efficiency in utilizing its shareholders’ funds.
Growth Projections: The Zacks Consensus Estimate for earnings per share is pegged at $8.60 for 2018 and at $8.62 for 2019. The consensus mark for 2018 indicates a year-over-year increase of 31.3% while the same for 2019 indicates 0.2% rise.
The expected long-term earnings growth rate is pegged at 12.5%, higher than the industry average of 10.6%.
Growth Score: The stock carries a Growth Score of B. Growth Score analyzes the growth prospects of a company.
Positive Earnings Surprise History: American Financial Group surpassed the Zacks Consensus Estimate in the last eight quarters with the average beat being 22.55%, reflecting its operational efficiencies.
Stocks to Consider
Some better-ranked property and casualty insurers are Berkshire Hathaway Inc. (BRK.B - Free Report) , Mercury General Corp. (MCY - Free Report) and Atlas Financial Holdings, Inc. .
Berkshire Hathaway engages in insurance, freight rail transportation and utility businesses. It came up with a beat of 11.60% in the previously reported quarter. It sports a Zacks Rank #1 (Strong Buy). YYou can see the complete list of today’s Zacks #1 Rank stocks here.
Mercury General engages in writing personal automobile insurance in the United States. It came up with a beat of 85.00% in the previously reported quarter. It sports a Zacks Rank #1.
Atlas Financial engages in underwriting commercial automobile insurance policies in the United States. It carries a Zacks Rank #2 (Buy).
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>