AFLAC INC (AFL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFL - US0010551028 - Common Stock
108.3 USD
-0.26 (-0.24%)
108.3 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to AFL. AFL was compared to 149 industry peers in the Insurance industry. There are concerns on the financial health of AFL while its profitability can be described as average. While showing a medium growth rate, AFL is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
- In the past year AFL was profitable.
- AFL had a positive operating cash flow in the past year.
- In the past 5 years AFL has always been profitable.
- AFL had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of AFL (3.41%) is better than 69.13% of its industry peers.
- AFL has a Return On Equity of 14.53%. This is in the better half of the industry: AFL outperforms 68.46% of its industry peers.
- The Return On Invested Capital of AFL (3.81%) is better than 65.10% of its industry peers.
- AFL had an Average Return On Invested Capital over the past 3 years of 3.95%. This is significantly below the industry average of 14.92%.
| 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 94.63% of its industry peers.
- AFL's Profit Margin has improved in the last couple of years.
- AFL's Operating Margin of 29.97% is amongst the best of the industry. AFL outperforms 91.95% 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.
- Compared to 5 years ago, AFL has less shares outstanding
- The debt/assets ratio for AFL is higher compared to a year ago.
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 46.31% of the companies in the same industry.
- A Debt/Equity ratio of 0.30 indicates that AFL is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.30, AFL is in line with its industry, outperforming 54.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 3.34 | ||
| Altman-Z | N/A |
ROIC/WACC0.47
WACC8.13%
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.
- The Earnings Per Share has been growing by 10.21% on average over the past years. This is quite good.
- The Revenue has been growing slightly by 2.32% in the past 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
- The Earnings Per Share is expected to grow by 4.12% on average over the next years.
- 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 Y5.24%
EPS Next 2Y1.56%
EPS Next 3Y3.01%
EPS Next 5Y4.12%
Revenue Next Year0.2%
Revenue Next 2Y0.17%
Revenue Next 3Y0.59%
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.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 14.44, which indicates a correct valuation of AFL.
- AFL's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.32. AFL is valued slightly cheaper when compared to this.
- With a Price/Forward Earnings ratio of 14.54, AFL is valued correctly.
- AFL's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AFL is more expensive than 61.07% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 24.32. AFL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.44 | ||
| Fwd PE | 14.54 |
4.2 Price Multiples
- AFL's Enterprise Value to EBITDA is on the same level as the industry average.
- 65.10% of the companies in the same industry are cheaper than AFL, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.06 | ||
| EV/EBITDA | 9.49 |
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.
- AFL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.76
PEG (5Y)1.41
EPS Next 2Y1.56%
EPS Next 3Y3.01%
5. Dividend
5.1 Amount
- AFL has a Yearly Dividend Yield of 2.23%.
- Compared to an average industry Dividend Yield of 2.53, AFL has a dividend in line with its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.83, AFL pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
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 their dividend for at least 10 years, which is a reliable track record.
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.
- The dividend of AFL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP28.14%
EPS Next 2Y1.56%
EPS Next 3Y3.01%
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 5.24% in the next year.