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American Financial Trades Above 200-Day SMA: Time to Hold AFG Stock?
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Key Takeaways
AFG's combined ratio has outperformed the industry average for over 20 years, with a 2025 target of 92.5%.
AFG boasts 18 straight years of dividend increases, with a 10-year dividend CAGR of 12.4%.
AFG benefits from consistent renewal pricing increases, reporting 35 consecutive quarters of rate hikes.
American Financial Group, Inc. (AFG - Free Report) has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend. Its share price as of Monday was $139.32, down 7.2% from its 52-week high of $150.19.
The 200-day SMA is a long-term technical indicator that averages a stock's closing price over the last 200 trading days to smooth out volatility and identify the broader trend direction. When the stock price crosses above the 200-day SMA, it can be a signal to buy or hold.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $11.61 billion. The average volume of shares traded in the last three months was 0.4 million.
Shares of American Financial have gained 2% in the past year, underperforming the industry’s return of 6.4%.
Image Source: Zacks Investment Research
AFG’s Expensive Valuation
Based on the forward 12-month price-to-book ratio, American Financial is currently trading at 2.58X, above its industry average of 1.55X. The insurer has a Value Score of B. Shares of other insurers like The Allstate Corporation (ALL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , and The Progressive Corporation (PGR - Free Report) are also trading at a multiple higher than the industry average.
AFG’s Growth Projection Encourages
The Zacks Consensus Estimate for 2026 earnings per share and revenues indicates an increase of 22% and 10.7%, respectively, from the corresponding 2025 estimates.
AFG’s Favorable Return on Capital
American Financial’s return on equity has also been improving over the last few quarters, reflecting its efficiency in utilizing shareholders’ funds. The trailing 12 months ROE was 17.4%, which compared favorably with the industry average of 7.6%.
Factors Favoring AFG
New business opportunities, increased exposure and a good renewal rate environment, coupled with additional crop premiums from the Crop Risk Services acquisition, position AFG well for growth.
American Financial, a niche player in the P&C market, is likely to benefit from strategic acquisitions and improved pricing. Improved industry fundamentals drive overall growth.
American Financial witnessed average renewal pricing across the entire P&C Group. It intends to maintain satisfactory rates in P&C renewal pricing going forward. AFG has reported overall renewal rate increases for 35 consecutive quarters, and it is expected to achieve overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns. The property and casualty insurer expects to achieve overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns.
Its combined ratio has been better than the industry average for more than two decades. Specialty niche focus, product line diversification and underwriting discipline should help AFG outperform the industry’s underwriting results.
Wealth Distribution
American Financial has increased its dividend for 18 straight years, apart from paying special dividends occasionally. This reflects its financial stability, which stems from robust operating profitability in the P&C segment, stellar investment performance and effective capital management.
Notably, the 10-year compound annual growth rate for the company's regular annual dividends stands at an impressive 12.4%. This track record underscores its prudent financial management and stability. The dividend yield is 2.3%, better than the industry average of 0.2%.
Wrapping Up: Keep on Holding
American Financial’s prudent capital deployment, increased exposures, good renewal rate environment and improved combined ratio make it an attractive stock. It intends to maintain satisfactory rates in P&C renewal pricing going forward.
Despite its expensive valuation and bearish analysts’ sentiment, American Financial should benefit from strategic acquisitions, new business opportunities, stronger underwriting profit and favorable growth estimates. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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American Financial Trades Above 200-Day SMA: Time to Hold AFG Stock?
Key Takeaways
American Financial Group, Inc. (AFG - Free Report) has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend. Its share price as of Monday was $139.32, down 7.2% from its 52-week high of $150.19.
The 200-day SMA is a long-term technical indicator that averages a stock's closing price over the last 200 trading days to smooth out volatility and identify the broader trend direction. When the stock price crosses above the 200-day SMA, it can be a signal to buy or hold.
Image Source: Zacks Investment Research
The insurer has a market capitalization of $11.61 billion. The average volume of shares traded in the last three months was 0.4 million.
Shares of American Financial have gained 2% in the past year, underperforming the industry’s return of 6.4%.
Image Source: Zacks Investment Research
AFG’s Expensive Valuation
Based on the forward 12-month price-to-book ratio, American Financial is currently trading at 2.58X, above its industry average of 1.55X. The insurer has a Value Score of B. Shares of other insurers like The Allstate Corporation (ALL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) , and The Progressive Corporation (PGR - Free Report) are also trading at a multiple higher than the industry average.
AFG’s Growth Projection Encourages
The Zacks Consensus Estimate for 2026 earnings per share and revenues indicates an increase of 22% and 10.7%, respectively, from the corresponding 2025 estimates.
AFG’s Favorable Return on Capital
American Financial’s return on equity has also been improving over the last few quarters, reflecting its efficiency in utilizing shareholders’ funds. The trailing 12 months ROE was 17.4%, which compared favorably with the industry average of 7.6%.
Factors Favoring AFG
New business opportunities, increased exposure and a good renewal rate environment, coupled with additional crop premiums from the Crop Risk Services acquisition, position AFG well for growth.
American Financial, a niche player in the P&C market, is likely to benefit from strategic acquisitions and improved pricing. Improved industry fundamentals drive overall growth.
American Financial witnessed average renewal pricing across the entire P&C Group. It intends to maintain satisfactory rates in P&C renewal pricing going forward. AFG has reported overall renewal rate increases for 35 consecutive quarters, and it is expected to achieve overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns. The property and casualty insurer expects to achieve overall renewal rate increases in excess of prospective loss ratio trends to meet or exceed targeted returns.
Its combined ratio has been better than the industry average for more than two decades. Specialty niche focus, product line diversification and underwriting discipline should help AFG outperform the industry’s underwriting results.
Wealth Distribution
American Financial has increased its dividend for 18 straight years, apart from paying special dividends occasionally. This reflects its financial stability, which stems from robust operating profitability in the P&C segment, stellar investment performance and effective capital management.
Notably, the 10-year compound annual growth rate for the company's regular annual dividends stands at an impressive 12.4%. This track record underscores its prudent financial management and stability. The dividend yield is 2.3%, better than the industry average of 0.2%.
Wrapping Up: Keep on Holding
American Financial’s prudent capital deployment, increased exposures, good renewal rate environment and improved combined ratio make it an attractive stock. It intends to maintain satisfactory rates in P&C renewal pricing going forward.
Despite its expensive valuation and bearish analysts’ sentiment, American Financial should benefit from strategic acquisitions, new business opportunities, stronger underwriting profit and favorable growth estimates. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.