Since December 2025, American Financial Group has been in a holding pattern, posting a small loss of 1.4% while floating around $131.25. The stock also fell short of the S&P 500’s 7.5% gain during that period.

Is there a buying opportunity in American Financial Group, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Do We Think American Financial Group Will Underperform?

We’re swiping left on American Financial Group for now. Here are three reasons why there are better opportunities than AFG, plus one stock we’d rather own.

1. Net Premiums Earned Point to Soft Demand

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are:

• Gross premiums - what’s ceded to reinsurers as a risk mitigation and transfer strategy

American Financial Group’s net premiums earned has grown at a 3.2% annualized rate over the last two years, worse than the broader insurance industry and in line with its total revenue.

2. EPS Barely Growing

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

American Financial Group’s EPS grew at a weak 4.1% compounded annual growth rate over the last five years, lower than its 7.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

3. Substandard BVPS Growth Indicates Limited Asset Expansion

We consider book value per share (BVPS) a critical metric for insurance companies. BVPS represents the total net worth per share, providing insight into a company’s financial strength and ability to meet policyholder obligations.

Disappointingly for investors, American Financial Group’s BVPS grew at a sluggish 5.5% annual clip over the last two years.

Final Judgment

American Financial Group doesn’t pass our quality test. With its shares underperforming the market lately, the stock trades at 2.1× forward P/B (or $131.25 per share). This valuation tells us a lot of optimism is priced in - we think there are better opportunities elsewhere. We’d suggest looking at one of our top software and edge computing picks.

Stocks We Would Buy Instead of American Financial Group

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