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American Financial Group, Inc. (AFG)

Company Dividend Discount ModelIndustry: Insurance - Property & CasualtySector: Financial Services

Valuation Snapshot

Stable Growth$163.74 - $328.03$227.69
Multi-Stage$157.30 - $171.32$164.19
Blended Fair Value$195.94
Current Price$145.72
Upside34.46%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS12.16%16.78%9.428.1714.5028.373.995.314.714.982.212.10
YoY Growth--15.20%-43.61%-48.90%610.78%-24.77%12.69%-5.52%125.41%5.11%5.39%
Dividend Yield--7.17%6.07%11.93%19.48%3.50%7.57%4.86%4.44%2.32%2.99%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)798.00
(-) Cash Dividends Paid (M)770.00
(=) Cash Retained (M)28.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)159.6099.7559.85
Cash Retained (M)28.0028.0028.00
(-) Cash Required (M)-159.60-99.75-59.85
(=) Excess Retained (M)-131.60-71.75-31.85
(/) Shares Outstanding (M)83.6883.6883.68
(=) Excess Retained per Share-1.57-0.86-0.38
LTM Dividend per Share9.209.209.20
(+) Excess Retained per Share-1.57-0.86-0.38
(=) Adjusted Dividend7.638.348.82
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.24%5.24%6.24%
Fair Value$163.74$227.69$328.03
Upside / Downside12.37%56.25%125.11%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)798.00839.82883.84930.16978.901,030.211,061.11
Payout Ratio96.49%95.19%93.89%92.60%91.30%90.00%92.50%
Projected Dividends (M)770.00799.45829.88861.29893.72927.19981.53

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.24%5.24%6.24%
Year 1 PV (M)725.82732.78739.75
Year 2 PV (M)684.05697.24710.55
Year 3 PV (M)644.56663.29682.37
Year 4 PV (M)607.23630.86655.19
Year 5 PV (M)571.94599.91628.95
PV of Terminal Value (M)9,928.8810,414.3610,918.64
Equity Value (M)13,162.4813,738.4314,335.45
Shares Outstanding (M)83.6883.6883.68
Fair Value$157.30$164.19$171.32
Upside / Downside7.95%12.67%17.57%

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