American Financial Stock Fair Value Calculation – AMERICAN FINANCIAL Reports Record Fourth Quarter Earnings Results for FY2022

Earnings Overview

AMERICAN FINANCIAL ($NYSE:AFG)’s earnings for the fourth quarter of FY2022, which ended February 2, 2023, were reported on December 31, 2022. Total revenue was noted to be USD 276.0 million, a decrease of 22.3% compared to the same period from the previous year. Net income, however, was up 9.7% year-over-year at USD 1929.0 million.

Transcripts Simplified

American Financial Group returned a total of $3.9 billion in capital to shareholders in the form of dividends and share repurchases during 2021 and 2022. The company had quarterly dividend was increased by 12.5% to an annual rate of $2.52 per share beginning in October of 2022, and core net operating earnings per share of $2.99 produced an annualized fourth quarter core return on equity of 22.3%. The duration of the Property & Casualty fixed maturity portfolio was extended from approximately 2 years at December 31, 2021, to 3 years at December 31, 2022, and the yield earned on P& C fixed maturity portfolio is expected to increase by 20 basis points by the fourth quarter of 2023 compared to 4.15% earned for the fourth quarter of 2022.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for American Financial. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for American Financial. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for American Financial. More…

Key Ratios Snapshot

Some of the financial key ratios for American Financial are shown below. More…

Price History

On Thursday, AMERICAN FINANCIAL reported record fourth quarter earnings results for the fiscal year 2022. The company’s stock opened at $142.2 and closed at $134.8, a decrease of 2.3% from the previous closing price of $138.0. Over the last three months, AMERICAN FINANCIAL was able to generate high revenues and extraordinary profits due to its wide range of financial services including banking, insurance, and investments. Their banking sector in particular has seen a surge in growth, with new and innovative strategies that have allowed them to extend to international markets. The company has also made major advancements in customer technology, creating an easier and faster customer experience.

The customer service offered by AMERICAN FINANCIAL has achieved universal acclaim from both customers and investors alike, with their customer service team being highly rated for their attentiveness and helpfulness. These strong quarterly results are a testament to the hard work and dedication of the entire AMERICAN FINANCIAL team. As we look forward to the coming fiscal year, the company is poised for continued success as they continue to invest in innovation and customer service, enabling them to provide quality financial services for all their customers. Live Quote…

Analysis – American Financial Stock Fair Value Calculation

At GoodWhale, we have thoroughly analyzed the fundamentals of AMERICAN FINANCIAL and have come to the conclusion that its intrinsic value is around $101.6. This is determined using our proprietary Valuation Line which is a cutting-edge tool that incorporates several factors such as company financial performance, industry trends and analyst opinions. Currently, AMERICAN FINANCIAL’s stock is trading at a price of $134.8, making it overvalued by 32.7%. We believe that the current price is not justified according to our valuation, and though there is potential for further growth in the future, investors may wish to consider taking up more profitable opportunities at this point in time. More…

Peers

The company’s main competitors are HCI Group Inc, The Hanover Insurance Group Inc, and Donegal Group Inc.

– HCI Group Inc ($NYSE:HCI)

The company’s market cap is 280.02M as of 2022 and its ROE is -1.61%. The company is a provider of healthcare services.

– The Hanover Insurance Group Inc ($NYSE:THG)

The Hanover Insurance Group, Inc., together with its subsidiaries, provides various property and casualty products and services in the United States. The company operates in three segments: Commercial Lines, Personal Lines, and Other. The Commercial Lines segment offers property, automobile liability, workers’ compensation, commercial multi-peril, and surety products to small, medium, and large businesses, including professional service organizations, contractors, real estate firms, retailers, and not-for-profit organizations. The Personal Lines segment provides personal automobile and homeowners insurance products to individuals. The Other segment offers reinsurance products. The company markets and distributes its products and services through independent local, regional, and national agents and brokers.

– Donegal Group Inc ($NASDAQ:DGICA)

As of 2022, Donegal Group Inc has a market cap of 461.86M. It has a return on equity of 0.82%. The company provides insurance products and services to policyholders in the United States. Its products include personal automobile, homeowners, commercial automobile, workers’ compensation, and commercial property and liability insurance, as well as surety bonds.

Summary

Investors may want to take a closer look at American Financial’s fourth quarter FY2022 earnings results, despite a decrease in total revenue of 22.3%. Net income increased by 9.7%, showing possible promise for the company. Future investors should keep an eye on the company’s growth trajectory, as well as its strategies for future success. Additionally, they should obtain information about the competitive landscape in order to gain insight into American Financial’s competitive advantages and weaknesses, which can inform their investment decisions.