Where does American Financial Group rank after its 15% announced dividend increase?

afg

American Financial Group Incorporated (AFG) announced a regular quarterly dividend of $0.3215, a 15 percent increase from the prior rate of $0.28 per share. The dividend will be paid at the new higher rate on October 25, 2016, to shareholders of record at close of business on October 14, 2016. American Financial Group Inc. is currently priced at $75.08.

Listed in the table below are the quarterly dividend payments since 2010. Our analysis of American Financial Group Inc. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
10/14/2016 0.32
7/13/2016 0.28
4/13/2016 0.28
1/13/2016 0.28
12/11/2015 1
10/13/2015 0.28
7/13/2015 0.25
4/13/2015 0.25
1/13/2015 0.25
12/11/2014 1
10/10/2014 0.25
7/11/2014 0.22
4/11/2014 0.22
1/13/2014 0.22
12/12/2013 1
10/10/2013 0.22
7/11/2013 0.195
4/11/2013 0.195
1/11/2013 0.195
12/13/2012 0.25
10/11/2012 0.195
7/11/2012 0.175
4/11/2012 0.175
1/11/2012 0.175
10/12/2011 0.175
7/13/2011 0.163
4/13/2011 0.163
1/12/2011 0.163
10/13/2010 0.163
7/13/2010 0.138
4/13/2010 0.138
1/13/2010 0.138

Analysis of American Financial Group is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 1.49 342
Dividend Growth (3-6 year avg) 12.5% 189
Forward P/E 19.2 187
S&P Financial Rating B+ 200
Beta 0.90 100
Total Score 1,018

Additional Information on P/BV ratio and historical yield;

Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate BV 2016 P/BV Ratio 10 yr P/BV Low 10 yr P/BV High 5 yr max Yield % 5 yr lowest Yield %
1.49% 12.7% 12.5% 57.45 1.31 0.38 1.49 2.09% 1.37%

Final Analysis;

  • American Financial’s dividend yield is on average with that of the S&P 500 Index and is also trading towards the lower end of its average historical dividend yield.
  • American Financial maintains a 3 year dividend growth rate of 12.7%
  • American Financial has paid out a dividend consecutively for the past 22 years.
  • American Financial is trading above its average price/book value (P/BV) range at 1.31.  From a relative valuation perspective, American Financial is overvalued based upon its historical trading history.
  • American Financial maintains a credit rating of B+. This is below investment grade, a negative.
  • American Financial maintains a beta of 0.90, lower than the average company.

Based upon its high P/E ratio and poor credit rating, American Financial does not qualify as one of our Top 100 Dividend Stocks.

American Financial Group Inc. Dividend Yield Chart (Click to enlarge) afg

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s