AFG - American Financial Group: Attractive Due To Solid Underwriting And Multifamily Upside

2024-05-09 10:11:37 ET

Summary

• American Financial Group has seen moderate performance, rising 16% in the past year and paying out special dividends.
• AFG's Q1 results showed improved underwriting and strong premium growth driven by pricing increases.
• The company's specialty P&C combined ratio was strong, and its underwriting profits remained flat from last year's Q1.
• While multifamily reduced investment returns in Q1 and will weigh in 2024, long-term fundamentals are positive.

Shares of American Financial Group ( AFG ) have been a moderate performer over the past year, rising 16% and paying out $4 in special dividends on top of its regular 2.2% dividend. After some underwriting missteps last year, it has pushed premiums up and improved results. With strong capital generation and exposure to a recovery in multifamily rental units, AFG is poised for a strong year after a solid Q1. Since recommending shares of AFG in November , it has returned over 23%, beating the market’s 18% rally. I remain bullish....

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