AFG vs RLI

For growth investors, RLI Corp.

(RLI) is the stronger pick with 6. 3% revenue growth year-over-year, versus -1. 3% for American Financial Group, Inc. (AFG). RLI Corp. (RLI) offers the better valuation at 11. 2x trailing P/E (17. 7x forward), making it the more compelling value choice. Analysts rate American Financial Group, Inc. (AFG) a "Hold" — based on 17 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, RLI Corp.

(RLI) is the cheapest at 11. 2x versus American Financial Group, Inc. at 13. 1x. On forward P/E, American Financial Group, Inc. is actually cheaper at 11. 8x — notably different from the trailing picture, reflecting expected earnings growth. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: RLI Corp. wins at 0. 87x versus American Financial Group, Inc. 's 2. 82x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, American Financial Group, Inc.

(AFG) delivered a total return of +57. 3%, compared to +8. 5% for RLI Corp. (RLI). Over 10 years, the gap is even starker: AFG returned +213. 9% versus RLI's +106. 8%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), RLI Corp.

(RLI) is the lower-risk stock at -0. 01β versus American Financial Group, Inc. 's 0. 36β — meaning AFG is approximately -6273% more volatile than RLI relative to the S&P 500. On balance sheet safety, RLI Corp. (RLI) carries a lower debt/equity ratio of 6% versus 38% for American Financial Group, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), RLI Corp.

(RLI) is pulling ahead at 6. 3% versus -1. 3% for American Financial Group, Inc. (AFG). On earnings-per-share growth, the picture is similar: RLI Corp. grew EPS 16. 6% year-over-year, compared to -4. 6% for American Financial Group, Inc.. Over a 3-year CAGR, AFG leads at 6. 5% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

RLI Corp.

(RLI) is the more profitable company, earning 21. 4% net margin versus 10. 3% for American Financial Group, Inc. — meaning it keeps 21. 4% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RLI leads at 27. 5% versus 13. 1% for AFG. At the gross margin level — before operating expenses — AFG leads at 46. 3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, RLI Corp. (RLI) is the more undervalued stock at a PEG of 0. 87x versus American Financial Group, Inc. 's 2. 82x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, American Financial Group, Inc. (AFG) trades at 11. 8x forward P/E versus 17. 7x for RLI Corp. — 5. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for AFG: 16. 1% to $153. 50.

All stocks in this comparison pay dividends.

American Financial Group, Inc. (AFG) offers the highest yield at 5. 5%, versus 5. 3% for RLI Corp. (RLI).

For long-horizon retirement investors, RLI Corp.

(RLI) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β -0. 01), 5. 3% yield, +106. 8% 10Y return). Both have compounded well over 10 years (RLI: +106. 8%, AFG: +213. 9%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Financial Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.