Back to top

Analyst Blog

Zacks Equity Research

AFG to Pay Special Dividend

CINF AFG

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Recently, American Financial Group, Inc. (AFG - Analyst Report) declared a special dividend of 25 cents per share payable on December 24, 2012 to shareholders of record as of December 17, 2012. This implies a dividend yield of 0.63%, based on the closing price of $39.97 as of December 6, 2012.

This one-time cash dividend will lead to an expenditure of $23 million for American Financial. However, the company generated operating cash flows of $487 million in the first nine months of 2012, which is more than adequate to cover the expenditure for the special dividend. Moreover, the company’s cash and cash equivalents surged 22.8% year over year to $1.63 billion as of September 30, 2012.

American Financial’s sturdy financials and future prospects enable it to return capital to shareholders via dividends and share repurchases, thereby boosting shareholders’ confidence in the stock. Moreover, efficient capital management helps the company sustain its risk-adverse capital structure, while maintaining adequate capital flexibility required for growth.

American Financial consistently returns value to shareholders. Apart from paying dividends regularly, the company has a track record of raising its dividend each year.

In October this year, the company announced an 11.4% hike in its regular quarterly dividend to 19.5 cents from 17.5 cents paid earlier. The increased dividend was paid on October 25 to shareholders of record as of October 15. Even in October 2011, the company approved an 8% dividend hike to 17.5 cents from 16.25 cents.

American Financial currently carries a Zacks #3 Rank (Hold). We maintain a long-term ‘Neutral’ recommendation on the stock. The company’s peer in the property and casualty business – Cincinnati Financial Corp. (CINF - Analyst Report) – carries a Zacks #2 Rank (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%