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American Financial Hits 52-Week High on Solid Q2 Results

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On Aug 10, 2015, shares of American Financial Group Inc.AFG scaled a new 52-week high of $72.01 on solid second-quarter results and raised guidance. With about 0.28 million shares exchanging hands in the last trading session, the stock closed at $71.79 per share, gaining 0.70%.

The one-year return from the stock came in at 26.3%, which was ahead of the S&P 500's return of 8.9%.

With respect to earnings performance, this property and casualty insurer delivered positive surprises in each of the trailing four quarters with an average beat of 9.5%.

Strong Second Quarter Results

American Financial's second-quarter 2015 net operating earnings per share of $1.28 outperformed the Zacks Consensus Estimate by 5.8% and increased 19.6%. Higher underwriting profit and net investment income from Specialty Property and Casualty (P&C) insurance operations largely drove the upside. Also, improved operating earnings from the Annuity and Run-off Long-Term Care and Life segments supported the bottom-line growth.

American Financial's total revenue of $1.54 billion increased 10.7% year over year. The top-line growth was driven by higher P&C premiums earned as well as an increase in net investment income.

The quarter witnessed strong premiums written in the Specialty Property and Casualty segment and improved combined ratio.

Based on the solid second-quarter performance, the company raised its operating earnings guidance for 2015 to $5.25-$5.55 per share. The previous projection lies in the range of $5.10-$5.50 per share.

This Zacks Rank #3 (Hold) stock has been witnessing upward revisions in estimates over the last 30 days. For 2015, the Zacks Consensus Estimate for earnings moved north by 0.5% to $5.50 per share. The company's long-term growth is targeted at 8%.

Stocks to Consider

Some better-ranked stocks from the same space are First American Financial Corporation FAF , NMI Holdings, Inc. NMIH and Selective Insurance Group Inc. SIGI . All of the stocks sport a Zacks Rank #1 (Strong Buy).

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FIRST AMER FINL (FAF): Free Stock Analysis Report

AMER FINL GROUP (AFG): Free Stock Analysis Report

SELECT INS GRP (SIGI): Free Stock Analysis Report

NMI HOLDINGS-A (NMIH): Free Stock Analysis Report

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


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

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