Polliesdividend

American Family Life Assurance Company-AFLAC (AFL) Stock Analysis Pollie Style

Here on other analysis for Polliesdividend. In my portfolio I have no financials. And for a good diversification I want to look in this sector for an investment. There are a lot of financials. I choose to investigate Aflac after numerous blog articles from some of my favorite bloggers.

This analysis is on Aflac Inc (AFL).


Company (from google finance): Aflac Incorporated (Aflac) is a general business holding company and acts as a management company, overseeing the operations of its subsidiaries by providing management services. Its business is supplemental health and life insurance, through its subsidiary, American Family Life Assurance Company of Columbus, which operates in the United States and as a branch in Japan. Aflac’s insurance business consists of two segments: Aflac Japan and Aflac U.S. Aflac Japan sells voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans and annuities. Aflac U.S. sells voluntary supplemental insurance products including loss-of-income products and products designed to protect individuals from depletion of assets (hospital indemnity, fixed-benefit dental, vision care, accident, cancer, critical illness/ critical care, and hospital intensive care plans)..

Dividend Aristocrat: Aflac is paying Dividend for 31 years in a row! And is a Dividend Champion. It’s number 85 on the CCC-list form David Fish! And is a 3 star stock on Morningstar.com. That’s a Passed!

Dividend Yield > 2.5%: The dividend Yield of AFL is 2,48%. It’s above the industry average of 2.0%. Although is below the yield I want for the Pollie-Code, I think this is not a problem because its well above the industry average. And it is a metric that changes everyday with the stock price. The current Yield is very close to the requirement of the Pollie-Code. Therefore Aflac passed the second Pollie-code.

Dividend payout <70%: The current dividend is $1.48 and AFL has an earnings projection of around $ 6. The dividend payout is roughly 23%. This is way below the maximum ratio. This also means that they can keep those dividend increases coming for a long, long time. And that makes me happy! So also passed for this point.

DGR 1 year > 0%: The dividend growth rate for 1, 3, 5 en 10 years are 6.0, 7.6, 8.1 and 16.8. This shows a healthy (expected) increase over the years. With a 3 years average over 5% that makes me excited. So AFL also passed the fourth Pollie-code.

P/E-ratio < 15: The industry average is 15.9. AFL has a current P/E ratio is 9.1. This is very low and a rarity for a dividend aristocrat. This looks like a bargain. If I look at other companies the ratio is definitely lower than Chubb (CB) and Cincinnati Financial (CINF) of 10.4 and 18 respectively. Thanks to the Dividend Diplomats. This is another pass on the Pollie-code.

EPS > 0: The EPS is 6.45. So AFL also passed the sixth Pollie-Code

ROE > 10%: Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. The current ROE is 20.40%. Another pass.

Market Cap. > 100M: No problem at this point. More than $ 27.130 Mil. Another pass.

Chowder Rule > 12: Named after “Seeking Alpha” member Chowder. This is a method of identifying candidates for purchase based on a combination of yield and (5-year) dividend growth rate. When the sum of these elements is above 12%, the company presents an attractive entry point (8% for utilities). When the figure is above 8%, an existing holding is still considered worthy of being retained. The current Chowder rule is 10.6. This is just below the requirements of the Pollie-Code. This is therefore a fail on the Pollie-code.

Stock price 52wk high-25%: The 52 wk high and low are: 67.62 and 57.36. This means that AFL will be in my buying zone when the stock price is below 65.06 ((67.62-57.36)*0,75 + 57.36). At this moment it is a pass on the Pollie-Code.

Beta: I think it’s important to have low Beta stocks in my portfolio. This helps to have a stable income all the time, even when the market has a rapid decline. The Beta for AFL is 1.55. It is higher than I normally want, but this is normal for this industry.

Conclusion: When I look at the analysis, AFL passed 9 out of 10 from the Pollie-code. The Pollie-code only failed at the ROE. It is a great Stock!. Considering all the data AFL is a stock that is buyable. At this moment I don’t have enough cash to initiate a position. Normally I don’t want the fees for my investment be higher than 1% of my investment. So I need to save a little bit more (or re-allocate some assets).

What are you – the readers, thoughts on Aflac? Is it a buy? Please comment on my analysis and thanks for stopping by!

Pollie

Please follow and like us:
0

12 thoughts on “American Family Life Assurance Company-AFLAC (AFL) Stock Analysis Pollie Style

  1. Dividend for Starters

    Hi Pollie,

    That’s a nice overview. As you said many bloggers picked up this stock.

    It has had a small decline over the last couple of weeks. Last month I picked up my shares for AFLAC so I totally agree it’s a great stock for the long term.

    The only factor you’re not taking into account here, is that its result is heavily affected by the rate of the Yen. This could be an additional risk.

    Best wishes, DfS

    1. polliesdividend Post author

      Thanks for dropping by and your comment.
      Your correct about the Yen-risk. Therefore if I initiate a position, it will not be my greatest.

      via this post, again thank you for the Liebster Award nomination. See my new post!

      Cheers,

      Pollie

  2. DivHut

    AFL is a great long term buy. Recently the price has pulled back from well over $60 to just under. Many would argue this is a good entry point. Of course the market being the way it is recently you might want to wait before pulling the trigger and see what other opportunities may present itself. Thanks for sharing your analysis.

    1. polliesdividend Post author

      Hello DivHut,

      I agree with you that it is a great long term investment.
      At this moment I will be waiting what mister market is going to do. And ofcourse to save some money to invest 😉
      I really like to analyze stocks and share it with my readers. It helps me also to get a better understanding of my investments.
      Please Come back to read some more!
      Cheers,
      Pollie

  3. Keith

    Pollie,
    Another nice analysis. Aside from REITs, AFL and WFC are the only stocks that I hold in companies in the Financial sector (S&P). AFL is one of my top 10 holdings. The 10 year average P/E for AFL is 14.8, so normally it would be selling for around $90. It isn’t without risk, but we look for great companies to buy and hold for the long term, and this is a great opportunity to buy.
    Good luck,
    Keith

    1. polliesdividend Post author

      Keith,
      Thanks for your comment. I really appreciate it!
      AFL is a buy at this moment, I agree.
      Fir me: i have to choose between AFL or JNJ for my next investment
      Though choice.
      Cheers,
      Pollie

  4. Pingback: This week purchase | Polliesdividend

  5. Charline

    I read a lot of interesting content here. Probably you spend a lot of time writing, i know how to
    save you a lot of work, there is an online tool that creates high quality, SEO friendly articles in minutes, just search in google –
    masagaltas free content

    1. polliesdividend Post author

      Thanks for stopping by. By spending the time to write an article, i better understand the stock. And it gives me a better judgement.
      So thanks for the tip, but no thanks
      Cheers,
      Pollies

  6. Pingback: Revisión de Aflac | Los cazadividendos

Leave a Reply

Your email address will not be published. Required fields are marked *