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Is American Financial Group (AFG) a Great Value Stock Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is American Financial Group (AFG). AFG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 10.20 right now. For comparison, its industry sports an average P/E of 21.57. Over the past 52 weeks, AFG's Forward P/E has been as high as 12.92 and as low as 5.20, with a median of 8.60.

AFG is also sporting a PEG ratio of 1.37. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AFG's PEG compares to its industry's average PEG of 2.98. Within the past year, AFG's PEG has been as high as 2.37 and as low as 0.80, with a median of 1.93.

Value investors will likely look at more than just these metrics, but the above data helps show that American Financial Group is likely undervalued currently. And when considering the strength of its earnings outlook, AFG sticks out at as one of the market's strongest value stocks.


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