AFLAC INC (AFL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:AFL - US0010551028 - Common Stock
108.38 USD
-0.56 (-0.51%)
108.6 USD
+0.22 (+0.2%)
Taking everything into account, AFL scores 4 out of 10 in our fundamental rating. AFL was compared to 148 industry peers in the Insurance industry. While AFL is still in line with the averages on profitability rating, there are concerns on its financial health. AFL is valied quite expensively at the moment, while it does show a decent growth rate.
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.
- In the past 5 years AFL always reported a positive cash flow from operatings.
1.2 Ratios
- AFL's Return On Assets of 3.41% is fine compared to the rest of the industry. AFL outperforms 69.59% of its industry peers.
- With a decent Return On Equity value of 14.53%, AFL is doing good in the industry, outperforming 68.92% of the companies in the same industry.
- AFL has a better Return On Invested Capital (3.81%) than 65.54% 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 14.94%.
| 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
- Looking at the Profit Margin, with a value of 23.55%, AFL belongs to the top of the industry, outperforming 94.59% of the companies in the same industry.
- 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.
- In the last couple of years the Operating Margin of AFL has grown nicely.
| 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.
- AFL has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, AFL has less shares outstanding
- AFL has a worse debt/assets ratio than last year.
2.2 Solvency
- AFL has a debt to FCF ratio of 3.34. This is a good value and a sign of high solvency as AFL would need 3.34 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 3.34, AFL is in line with its industry, outperforming 45.95% of the companies in the same industry.
- A Debt/Equity ratio of 0.30 indicates that AFL is not too dependend on debt financing.
- 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
WACC8.09%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
- AFL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.70%, which is quite good.
- The Earnings Per Share has been growing by 10.21% on average over the past years. This is quite good.
- Looking at the last year, AFL shows a small growth in Revenue. The Revenue has grown by 2.32% in the last year.
- The Revenue has been decreasing by -3.26% on average over the past years.
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
- Based on estimates for the next years, AFL will show a small growth in Earnings Per Share. The EPS will grow by 4.12% on average per year.
- AFL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.93% yearly.
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
- AFL is valuated correctly with a Price/Earnings ratio of 14.45.
- Compared to the rest of the industry, the Price/Earnings ratio of AFL is on the same level as its industry peers.
- AFL's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.82.
- A Price/Forward Earnings ratio of 14.62 indicates a correct valuation of AFL.
- 61.49% of the companies in the same industry are cheaper than AFL, based on the Price/Forward Earnings ratio.
- AFL's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.95.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.45 | ||
| Fwd PE | 14.62 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AFL is on the same level as its industry peers.
- AFL's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AFL is more expensive than 66.22% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.08 | ||
| EV/EBITDA | 9.5 |
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)2.21
PEG (5Y)1.41
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.
- AFL's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| 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 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
- 28.14% of the earnings are spent on dividend by AFL. This is a low number and 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.