American Financial Group (NYSE: AFG) and AmTrust Financial Services (NASDAQ:AFSI) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.
This is a breakdown of recent recommendations for American Financial Group and AmTrust Financial Services, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Financial Group||0||1||2||0||2.67|
|AmTrust Financial Services||0||6||0||0||2.00|
This table compares American Financial Group and AmTrust Financial Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Financial Group||6.92%||11.09%||0.99%|
|AmTrust Financial Services||-5.67%||-3.33%||-0.36%|
Insider and Institutional Ownership
62.3% of American Financial Group shares are held by institutional investors. Comparatively, 29.3% of AmTrust Financial Services shares are held by institutional investors. 14.9% of American Financial Group shares are held by insiders. Comparatively, 50.8% of AmTrust Financial Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Valuation & Earnings
This table compares American Financial Group and AmTrust Financial Services’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American Financial Group||$6.87 billion||1.45||$475.00 million||$6.55||17.23|
|AmTrust Financial Services||$5.96 billion||0.41||-$348.88 million||$2.64||4.76|
American Financial Group has higher revenue and earnings than AmTrust Financial Services. AmTrust Financial Services is trading at a lower price-to-earnings ratio than American Financial Group, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
American Financial Group has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, AmTrust Financial Services has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
American Financial Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.2%. AmTrust Financial Services pays an annual dividend of $0.68 per share and has a dividend yield of 5.4%. American Financial Group pays out 21.4% of its earnings in the form of a dividend. AmTrust Financial Services pays out 25.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. American Financial Group has increased its dividend for 12 consecutive years.
American Financial Group beats AmTrust Financial Services on 13 of the 17 factors compared between the two stocks.
American Financial Group Company Profile
American Financial Group, Inc. (AFG) is a holding company engaged primarily in property and casualty insurance businesses. The Company, through Great American Insurance Group, focuses on commercial products for businesses, and is engaged in the sale of fixed and fixed-indexed annuities in the retail, financial institutions and education markets. It has four segments: Property and casualty insurance, Annuity, Run-off long-term care and life, and Other. It reports its property and casualty insurance business in specialty sub-segments, including Property and transportation, Specialty casualty and Specialty financial. AFG sells traditional fixed and fixed-indexed annuities in the retail, financial institutions and education markets through independent producers and through direct relationships with certain financial institutions. AFG also sells single premium annuities in financial institutions through direct relationships with certain banks and through independent agents and brokers.
AmTrust Financial Services Company Profile
AmTrust Financial Services, Inc. provides property and casualty insurance in the United States and internationally. The company operates in three segments: Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Program. The Small Commercial Business segment offers workers' compensation insurance products; and commercial package, and other property and casualty insurance products, such as commercial property, general liability, inland marine, employment practices liability, commercial automobile, and umbrella coverage to small businesses. The Specialty Risk and Extended Warranty segment provides custom designed coverages, such as accidental damage plans, mechanical breakdown protection, and payment protection plans in connection with the sale of consumer and commercial goods; and coverage for niche property, casualty, and specialty liability risks comprising general liability, employers' liability, and professional and medical liability. The Specialty Program segment offers workers' compensation, general liability, commercial auto liability, property coverage, excess and surplus lines programs, and other specialty commercial property and casualty insurance products to small and middle market companies. The company also provides reinsurance services primarily for personal and commercial automotive business. It distributes its policies third-party brokers, agents, retailers, or administrators. AmTrust Financial Services, Inc. was founded in 1998 and is based in New York, New York.
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