American Financial Initiated at Neutral - Analyst Blog
29 1월 2014 - 4:50AM
Zacks
We have initiated coverage on American Financial Group
Inc. (AFG) with a Neutral recommendation.
American Financial is a niche player in the U.S. property and
casualty market. The company boasts of solid financial
fundamentals, including consistent profitability and a good market
position in a diverse group of specialty niche businesses.
The company is very adept at conducting new startups, undertaking
small-to-medium sized acquisitions and rolling out new products.
Over the past decade, the company has successfully made 10
acquisitions and startup ventures. The recently announced
acquisition of Summit Holdings is another strategic fit for the
company, which will enhance its presence in the worker compensation
market.
American Financial is also experiencing favorable pricing trends in
its property and casualty business which has seen price increases
in the past eight consecutive quarters. Along with price increase,
favorable loss cost trends offers growth momentum at the
company.
American Financial has also exhibited superior underwriting
profitability by maintaining its combined ratio at an average of
91.9% for the period 2010–2012 as compared to 104.6% clocked by the
property and casualty industry over the same period.
However, headwinds such as low interest rates, exposure to
catastrophes and growing total costs are likely to pressurize
earnings over the near term.
Nevertheless, American Financial’s strong balance sheet, consistent
dividend increases and a disciplined capital management are some
other positives that make us optimistic about the company’s
performance going forward.
American Financial presently carries a Zacks Rank #2 (Buy). The
company is expected to release its fourth-quarter earnings on Jan
30, 2014. The Zacks Consensus Estimate for fourth-quarter earnings
stands at $1.23 per share which translates into year-over-year
growth of 83.5%. For full year 2013, earnings of $4.17 per share is
expected which reflects year-over-year growth of 27.5%.
Some other stocks worth considering in the property and casualty
industry include Ace Limited (ACE), Aspen
Insurance Holdings Ltd. (AHL) and The Chubb
Corp. (CB). All these stocks sport a Zacks Rank #1 (Strong
Buy).
ACE LIMITED (ACE): Free Stock Analysis Report
AMER FINL GROUP (AFG): Free Stock Analysis Report
ASPEN INS HLDGS (AHL): Free Stock Analysis Report
CHUBB CORP (CB): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
American Financial (NYSE:AFG)
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American Financial (NYSE:AFG)
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부터 7월(7) 2023 으로 7월(7) 2024