On January 2, Zacks Investment Research upgraded
American Financial Group Inc.
) 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
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
Other Stocks to Consider
The following property & casualty insurers with a favorable
Zacks Rank are also performing well and are worth considering.
Emc Insurance Group Inc.
) carries a Zacks #1 Rank (Strong Buy)
Global Indemnity Plc Ireland
) holds a Zacks #1 Rank (Strong Buy)
AMER FINL GROUP (AFG): Free Stock Analysis
EMC INSURANCE (EMCI): Free Stock Analysis
GLOBAL INDEMNTY (GBLI): Free Stock Analysis
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