American Financial Group, Inc. (AFG) vs The Hanover Insurance Group, Inc. (THG)

American Financial Group, Inc. and The Hanover Insurance Group, Inc. are both Insurance Property & Casualty companies. American Financial Group, Inc. is the larger, with a market value of $11.5B against $7.6B — 1.5× the size. The Hanover Insurance Group, Inc. trades at the lower P/E: 10.3× against 12.1×. The Hanover Insurance Group, Inc. grew revenue faster over the last twelve months: 5.57% against −0.24%. American Financial Group, Inc. has the higher net margin (11.5% vs 11.2%) and the higher return on invested capital (14.4% vs 14.2%). Both pay a dividend; American Financial Group, Inc. yields more (4.48% vs 2.64%). Across the 23 metrics below, The Hanover Insurance Group, Inc. leads on 16 and American Financial Group, Inc. on 7.

Valuation

Metric AFG THG Insurance Property & Casualty median
P/E 12.08 10.28 10.29
P/S 1.39 1.13 1.17
P/B 2.38 2.07 1.83
Price to free cash flow 7.98 6.07 7.48
EV/EBITDA 8.58 8.07 7.49
EV/Sales 1.43 1.21 1.13
Earnings yield 8.28% 9.73% 9.50%
Free cash flow yield 12.53% 16.47% 13.29%

Profitability

Metric AFG THG Insurance Property & Casualty median
Gross margin 22.29% 44.76% 41.16%
Operating margin 15.60% 14.98% 15.09%
Net margin 11.51% 11.17% 11.51%
Free cash flow margin 17.37% 18.52% 17.59%
Return on equity 20.41% 21.94% 18.19%
Return on assets 2.99% 4.64% 3.74%
Return on invested capital 14.44% 14.21% 12.06%

Growth

Metric AFG THG Insurance Property & Casualty median
Revenue growth (TTM) (0.24%) 5.57% 8.69%
EPS growth (last fiscal year) (4.64%) 55.21% —
Revenue growth, 5-year CAGR 7.22% 6.45% 9.23%
Net income growth, 5-year CAGR 2.84% 13.06% 10.09%

Health

Metric AFG THG Insurance Property & Casualty median
Debt to equity 0.38 0.23 0.25
Current ratio 0.49 0.37 0.42
Net debt to EBITDA 0.08 0.11 0.08

Dividend

Metric AFG THG Insurance Property & Casualty median
Dividend yield 4.48% 2.64% 2.79%
Payout ratio 0.25 0.37 0.27

Size

Metric AFG THG Insurance Property & Casualty median
Market cap 11.48b 7.59b 2.44b

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