American Financial Group Raises Dividend 10.2% to $0.97

American Financial Group Inc. raised its quarterly dividend 10.2% to $0.97 a share from $0.88. The shares traded ex-dividend on October 15, 2026, and the higher payment is due October 23, 2026.

Why the dividend changed

AFG’s board framed the increase as a product of financial strength rather than a corporate restructuring. The company’s co-chief executive officers, S. Craig Lindner and Carl H. Lindner III, said returning excess capital through dividends remains an important part of capital management and that the increase reflected confidence in AFG’s financial condition, liquidity and long-term growth prospects. This was a regular cash-dividend increase, not an adjustment related to a split, merger or spin-off. AFG’s dividend-increase announcement

The decision followed improved operating results in AFG’s specialty property and casualty insurance businesses. Second-quarter net earnings were $248 million, compared with $174 million a year earlier, while core net operating earnings rose to $234 million from $179 million. Pretax property and casualty operating income reached a second-quarter record of $350 million, supported by higher underwriting profit and stronger returns from alternative investments. AFG’s second-quarter results

The underwriting figures also supported the capital-return decision. Net written premiums grew 6% in the quarter, while the combined ratio improved to 91.5% from 93.1%. A ratio below 100% means premiums exceeded claims and underwriting expenses before investment income. Management said AFG still had significant excess capital at the end of the quarter and intended to balance regular and special dividends and share repurchases with investments in organic growth, acquisitions and business start-ups.

AFG subsequently completed the sale of Charleston Harbor Resort & Marina. The company said it expected approximately $125 million of pretax core operating earnings from the transaction, subject to final accounting and closing adjustments. The sale added another source of capital after the board had approved the higher regular dividend. Charleston Harbor sale announcement

Dividend track record

The October payment established a new quarterly base of $0.97 after regular payments of $0.88 in January, April and July 2026. A separate $1.50 payment went ex-dividend in February. That mix illustrates an important feature of AFG’s record: the regular dividend has risen steadily, while discretionary special payments make total annual income less predictable.

AFG says the latest increase marked its 21st consecutive year of regular dividend increases. The last annual cut was in 2002. The regular dividend’s five-year growth rate was 13.3% annual growth, showing that the latest increase is consistent with the company’s recent pace rather than an isolated step-up.

Annual totals fluctuate because of the additional payments. AFG distributed $9.43 a share across six payments in 2024, then $7.28 across six payments in 2025, a decline of 22.8%. The pattern was more pronounced earlier: annual payments reached $28.06 in 2021, rose 628.8%, and then fell 49.0% to $14.31 in 2022. Those changes do not represent cuts to the regular quarterly rate. They reflect the variable contribution from special dividends, which AFG identifies separately in its dividend history.

Is the dividend covered?

The regular dividend consumes 30% of earnings. That leaves most earnings available for retained capital, insurance growth, repurchases, acquisitions and discretionary special distributions. It also provides a buffer against the volatility that can affect underwriting and investment results.

SmarterDividends rates the dividend A with a safety score of 94, meaning very safe. The grade reflects the low earnings payout ratio, established regular-dividend record and financial capacity indicated by the company’s recent results. It applies to the regular dividend. Special payments remain discretionary and account for much of the variation in annual totals.

Yield and valuation

At a share price of $149.13, the new $3.88 annual dividend produces a 2.60% forward yield. That trails the Financial Services sector median forward yield of 5.83%. The lower relative yield means AFG provides less regular dividend income per dollar invested than the median sector company, despite its history of regular increases. At the new rate, 100 shares generate $388.00 in annual regular income.

SmarterDividends estimates fair value at $196.58 and classifies the shares as undervalued. Against the stated share price, the estimate represents 32% upside to fair value. That valuation assessment is separate from dividend safety and does not alter the payment schedule or coverage ratios.

What to watch

The immediate item is the $0.97 payment scheduled for October 23, 2026. AFG has not provided a subsequent ex-dividend date. Investors tracking income should distinguish the new recurring quarterly amount from any future special distribution because the latter can materially change the full-year total without changing the regular rate.

AFG plans to release third-quarter results after the market closes on November 3, 2026, followed by a conference call on November 4, 2026. The report will provide updated underwriting margins, premium growth, investment income and capital-management activity, including the accounting effect of the Charleston Harbor transaction. AFG’s third-quarter reporting schedule