AFLAC INC (AFL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFL - US0010551028 - Common Stock
110.51 USD
+1.59 (+1.46%)
110.56 USD
+0.05 (+0.05%)
AFL gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 148 industry peers in the Insurance industry. AFL has a medium profitability rating, but doesn't score so well on its financial health evaluation. While showing a medium growth rate, AFL is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- AFL had positive earnings in the past year.
- In the past year AFL had a positive cash flow from operations.
- AFL had positive earnings in each of the past 5 years.
- In the past 5 years AFL always reported a positive cash flow from operatings.
1.2 Ratios
- AFL has a Return On Assets of 3.41%. This is in the better half of the industry: AFL outperforms 69.59% of its industry peers.
- AFL has a better Return On Equity (14.53%) than 68.92% of its industry peers.
- Looking at the Return On Invested Capital, with a value of 3.81%, AFL is in the better half of the industry, outperforming 65.54% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for AFL is significantly below the industry average of 14.94%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.41% | ||
| ROE | 14.53% | ||
| ROIC | 3.81% |
ROA(3y)3.83%
ROA(5y)3.43%
ROE(3y)20.97%
ROE(5y)18.03%
ROIC(3y)3.95%
ROIC(5y)3.48%
1.3 Margins
- AFL has a better Profit Margin (23.55%) than 94.59% of its industry peers.
- In the last couple of years the Profit Margin of AFL has grown nicely.
- The Operating Margin of AFL (29.97%) is better than 91.89% of its industry peers.
- AFL's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.97% | ||
| PM (TTM) | 23.55% | ||
| GM | N/A |
OM growth 3Y11.49%
OM growth 5Y10.66%
PM growth 3Y13.73%
PM growth 5Y14.22%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AFL is destroying value.
- The number of shares outstanding for AFL has been reduced compared to 1 year ago.
- The number of shares outstanding for AFL has been reduced compared to 5 years ago.
- Compared to 1 year ago, AFL has a worse debt to assets ratio.
2.2 Solvency
- The Debt to FCF ratio of AFL is 3.34, which is a good value as it means it would take AFL, 3.34 years of fcf income to pay off all of its debts.
- With a Debt to FCF ratio value of 3.34, AFL perfoms like the industry average, outperforming 45.95% of the companies in the same industry.
- AFL has a Debt/Equity ratio of 0.30. This is a healthy value indicating a solid balance between debt and equity.
- AFL has a Debt to Equity ratio (0.30) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | N/A |
ROIC/WACC0.47
WACC8.14%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 8.70% over the past year.
- AFL shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.21% yearly.
- Looking at the last year, AFL shows a small growth in Revenue. The Revenue has grown by 2.32% in the last year.
- AFL shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.26% yearly.
EPS 1Y (TTM)8.7%
EPS 3Y6.78%
EPS 5Y10.21%
EPS Q2Q%15.28%
Revenue 1Y (TTM)2.32%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%60.73%
3.2 Future
- AFL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.12% yearly.
- Based on estimates for the next years, AFL will show a small growth in Revenue. The Revenue will grow by 1.93% on average per year.
EPS Next Y6.54%
EPS Next 2Y1.32%
EPS Next 3Y2.93%
EPS Next 5Y4.12%
Revenue Next Year0.2%
Revenue Next 2Y-0.06%
Revenue Next 3Y0.44%
Revenue Next 5Y1.93%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 14.73, the valuation of AFL can be described as correct.
- AFL's Price/Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Earnings ratio of 28.39, AFL is valued a bit cheaper.
- Based on the Price/Forward Earnings ratio of 14.91, the valuation of AFL can be described as correct.
- Based on the Price/Forward Earnings ratio, AFL is valued a bit more expensive than the industry average as 61.49% of the companies are valued more cheaply.
- The average S&P500 Price/Forward Earnings ratio is at 25.72. AFL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.73 | ||
| Fwd PE | 14.91 |
4.2 Price Multiples
- AFL's Enterprise Value to EBITDA ratio is in line with the industry average.
- Based on the Price/Free Cash Flow ratio, AFL is valued a bit more expensive than the industry average as 66.22% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.51 | ||
| EV/EBITDA | 9.54 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AFL does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of AFL may justify a higher PE ratio.
PEG (NY)2.25
PEG (5Y)1.44
EPS Next 2Y1.32%
EPS Next 3Y2.93%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.25%, AFL has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.41, AFL has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, AFL pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.25% |
5.2 History
- On average, the dividend of AFL grows each year by 13.11%, which is quite nice.
- AFL has paid a dividend for at least 10 years, which is a reliable track record.
- AFL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.11%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- AFL pays out 28.14% of its income as dividend. This is a sustainable payout ratio.
- AFL's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP28.14%
EPS Next 2Y1.32%
EPS Next 3Y2.93%
AFLAC INC / AFL FAQ
What is the ChartMill fundamental rating of AFLAC INC (AFL) stock?
ChartMill assigns a fundamental rating of 4 / 10 to AFL.
Can you provide the valuation status for AFLAC INC?
ChartMill assigns a valuation rating of 3 / 10 to AFLAC INC (AFL). This can be considered as Overvalued.
What is the profitability of AFL stock?
AFLAC INC (AFL) has a profitability rating of 6 / 10.
Can you provide the financial health for AFL stock?
The financial health rating of AFLAC INC (AFL) is 3 / 10.
Can you provide the expected EPS growth for AFL stock?
The Earnings per Share (EPS) of AFLAC INC (AFL) is expected to grow by 6.54% in the next year.