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American Financial Group, Inc. (AFG)

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

Valuation Snapshot

Stable Growth$164.35 - $330.11$228.75
Multi-Stage$157.77 - $171.84$164.68
Blended Fair Value$196.72
Current Price$145.72
Upside35.00%
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 Rate9.08%9.08%9.08%
Growth Rate4.24%5.24%6.24%
Fair Value$164.35$228.75$330.11
Upside / Downside12.78%56.98%126.53%

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 Rate9.08%9.08%9.08%
Growth Rate4.24%5.24%6.24%
Year 1 PV (M)725.94732.90739.87
Year 2 PV (M)684.27697.47710.78
Year 3 PV (M)644.88663.61682.71
Year 4 PV (M)607.63631.28655.62
Year 5 PV (M)572.41600.40629.47
PV of Terminal Value (M)9,966.5010,453.8110,960.00
Equity Value (M)13,201.6313,779.4814,378.45
Shares Outstanding (M)83.6883.6883.68
Fair Value$157.77$164.68$171.84
Upside / Downside8.27%13.01%17.92%

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