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    Does AFG's Twentieth Dividend Increase Reflect Deep Financial Strength or Mask Growth Challenges?

    Simply Wall St·08/20/2025 10:14:46
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    • On August 19, 2025, American Financial Group announced that its Board of Directors approved a 10% increase in its regular annual dividend to US$3.52 per share, to be paid quarterly beginning in October 2025.
    • This marks the twentieth consecutive year of dividend growth for the company, with a ten-year compound annual growth rate in regular annual dividends of 12.3%.
    • We’ll explore how two decades of uninterrupted dividend increases underscore management’s confidence in American Financial Group’s long-term financial outlook.

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    American Financial Group Investment Narrative Recap

    To be an American Financial Group shareholder, you need confidence in the company’s strong capital management and consistent shareholder returns, especially through market cycles. The recent 10% dividend increase to US$3.52 per share highlights ongoing commitment to capital return, but does not materially affect the short-term catalyst, which remains the company’s ability to grow earnings despite recent profit declines. However, the biggest risk continues to be ongoing pressure on underwriting profit and volatile alternative investments, which could impact earnings consistency.

    Among recent announcements, the August share buyback, where AFG repurchased over 782,000 shares for US$122.53 million, aligns with the company’s long-standing focus on shareholder value. While buybacks and dividend growth both support per-share value, recent earnings declines mean that future capital return activities remain closely tied to the company's underlying profitability.

    On the other hand, investors should be aware that increasing catastrophe losses and evolving reserve developments could...

    Read the full narrative on American Financial Group (it's free!)

    American Financial Group's outlook anticipates $7.6 billion in revenue and $1.1 billion in earnings by 2028. This projection assumes a revenue decline of 1.9% per year and a $336 million increase in earnings from the current $764 million level.

    Uncover how American Financial Group's forecasts yield a $130.60 fair value, in line with its current price.

    Exploring Other Perspectives

    AFG Community Fair Values as at Aug 2025
    AFG Community Fair Values as at Aug 2025

    Two members of the Simply Wall St Community estimated AFG’s fair value between US$130.60 and US$266.61 per share. With such a wide range of views, keep in mind that rising catastrophe losses and underwriting risk remain top of mind for many participants when assessing future performance.

    Explore 2 other fair value estimates on American Financial Group - why the stock might be worth just $130.60!

    Build Your Own American Financial Group Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.