American Financial: A Strong Buy - Analyst Blog

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On January 2, Zacks Investment Research upgraded American Financial Group Inc. ( AFG ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

American Financial has been witnessing rising earnings estimates on the back of a strong solid third-quarter performance and an enhanced guidance for 2012. Moreover, this property & casualty insurer delivered positive earnings surprises in all the 4 quarters with an average beat of 18.7%. The long-term expected earnings growth rate for this stock is 8%.    

American Financial reported third-quarter results on October 29. Non-GAAP earnings per share came in at 82 cents, surpassing the Zacks Consensus Estimate by 39%. However, it lagged the year-ago number by 8.9%.

The upside was largely due to higher income in the Annuity and Supplemental Insurance Group.

Based on its progress and to accommodate the expected loss from Hurricane Sandy, the company revised its earnings per share projection for 2012 to $3.10-$3.30 from $3.10-$3.50.

Additionally, American Financial declared a special dividend of 25 cents per share, besides an 11.4% hike in its regular quarterly dividend.

The Zacks Consensus Estimate for 2012 is $2.66 per share as 3 of the 7 estimates were revised upward over the last 60 days. The current estimate is below the guidance range provided by American Financial. For 2013, one estimate moved higher over the same time frame, lifting the Zacks Consensus Estimate by 1.1% to $3.71 per share.

Other Stocks to Consider

The following property & casualty insurers with a favorable Zacks Rank are also performing well and are worth considering.

1)     Emc Insurance Group Inc. ( EMCI ) carries a Zacks #1 Rank (Strong Buy)
2)     Global Indemnity Plc Ireland ( GBLI ) holds a Zacks #1 Rank (Strong Buy)



AMER FINL GROUP (AFG): Free Stock Analysis Report

EMC INSURANCE (EMCI): Free Stock Analysis Report

GLOBAL INDEMNTY (GBLI): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AFG , EMCI , GBLI

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