AFLAC INC (AFL) Stock Fundamental Analysis
NYSE:AFL - New York Stock Exchange, Inc. - US0010551028 - Common Stock - Currency: USD
AFL gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 145 industry peers in the Insurance industry. AFL has an excellent profitability rating, but there are concerns on its financial health. AFL is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
AFL had positive earnings in the past year.
AFL had a positive operating cash flow in the past year.
AFL had positive earnings in each of the past 5 years.
Each year in the past 5 years AFL had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 2.99%, AFL is doing good in the industry, outperforming 70.34% of the companies in the same industry.
AFL has a Return On Equity of 13.64%. This is in the better half of the industry: AFL outperforms 67.59% of its industry peers.
AFL's Return On Invested Capital of 3.34% is fine compared to the rest of the industry. AFL outperforms 71.03% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AFL is in line with the industry average of 4.07%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.99% | ||
| ROE | 13.64% | ||
| ROIC | 3.34% |
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 21.28%, AFL belongs to the top of the industry, outperforming 92.41% of the companies in the same industry.
AFL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 27.18%, AFL belongs to the best of the industry, outperforming 92.41% of the companies in the same industry.
AFL's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.18% | ||
| PM (TTM) | 21.28% | ||
| 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 3.13, which is a good value as it means it would take AFL, 3.13 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AFL (3.13) is worse than 60.00% of its industry peers.
AFL has a Debt/Equity ratio of 0.29. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of AFL (0.29) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 3.13 | ||
| Altman-Z | N/A |
ROIC/WACC0.41
WACC8.18%
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 13.34% over the past year.
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 very negative growth in Revenue. The Revenue has decreased by -12.66% 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)13.34%
EPS 3Y6.78%
EPS 5Y10.21%
EPS Q2Q%0%
Revenue 1Y (TTM)-12.66%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%-37.49%
3.2 Future
The Earnings Per Share is expected to grow by 3.33% on average over the next years.
AFL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.14% yearly.
EPS Next Y-5.99%
EPS Next 2Y0.1%
EPS Next 3Y1.58%
EPS Next 5Y3.33%
Revenue Next Year0.92%
Revenue Next 2Y0.85%
Revenue Next 3Y1.35%
Revenue Next 5Y2.14%
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
With a Price/Earnings ratio of 14.07, AFL is valued correctly.
The rest of the industry has a similar Price/Earnings ratio as AFL.
The average S&P500 Price/Earnings ratio is at 27.30. AFL is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.04, which indicates a correct valuation of AFL.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AFL indicates a slightly more expensive valuation: AFL is more expensive than 61.38% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. AFL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.07 | ||
| Fwd PE | 14.04 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AFL.
Based on the Price/Free Cash Flow ratio, AFL is valued a bit more expensive than 66.90% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.44 | ||
| EV/EBITDA | 10.61 |
4.3 Compensation for Growth
The decent profitability rating of AFL may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.38
EPS Next 2Y0.1%
EPS Next 3Y1.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.22%, AFL has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.64, AFL pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, AFL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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
31.03% 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.
DP31.03%
EPS Next 2Y0.1%
EPS Next 3Y1.58%
101.57
-0.71 (-0.69%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners59.47%
Inst Owner Change0%
Ins Owners0.79%
Ins Owner Change3.32%
Market Cap54.91B
Analysts66.32
Price Target108.38 (6.7%)
Short Float %1.97%
Short Ratio4.15
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend1.93
Dividend Growth(5Y)13.11%
DP31.03%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.91%
Min EPS beat(2)-4.02%
Max EPS beat(2)-1.8%
EPS beat(4)2
Avg EPS beat(4)8.6%
Min EPS beat(4)-4.02%
Max EPS beat(4)26.91%
EPS beat(8)5
Avg EPS beat(8)7.15%
EPS beat(12)8
Avg EPS beat(12)7.31%
EPS beat(16)11
Avg EPS beat(16)8.06%
Revenue beat(2)1
Avg Revenue beat(2)3.55%
Min Revenue beat(2)-21.36%
Max Revenue beat(2)28.46%
Revenue beat(4)2
Avg Revenue beat(4)-2.24%
Min Revenue beat(4)-34%
Max Revenue beat(4)28.46%
Revenue beat(8)5
Avg Revenue beat(8)3.26%
Revenue beat(12)8
Avg Revenue beat(12)2.49%
Revenue beat(16)11
Avg Revenue beat(16)2.06%
PT rev (1m)0.16%
PT rev (3m)0.31%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.66%
EPS NY rev (1m)0.04%
EPS NY rev (3m)-0.89%
Revenue NQ rev (1m)0.02%
Revenue NQ rev (3m)-5.02%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.07 | ||
| Fwd PE | 14.04 | ||
| P/S | 3.25 | ||
| P/FCF | 22.44 | ||
| P/OCF | 22.44 | ||
| P/B | 2.08 | ||
| P/tB | 2.11 | ||
| EV/EBITDA | 10.61 |
EPS(TTM)7.22
EY7.11%
EPS(NY)7.23
Fwd EY7.12%
FCF(TTM)4.53
FCFY4.46%
OCF(TTM)4.53
OCFY4.46%
SpS31.24
BVpS48.72
TBVpS48.23
PEG (NY)N/A
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.99% | ||
| ROE | 13.64% | ||
| ROCE | 3.85% | ||
| ROIC | 3.34% | ||
| ROICexc | 3.49% | ||
| ROICexgc | 3.57% | ||
| OM | 27.18% | ||
| PM (TTM) | 21.28% | ||
| GM | N/A | ||
| FCFM | 14.49% |
ROA(3y)3.83%
ROA(5y)3.43%
ROE(3y)20.97%
ROE(5y)18.03%
ROIC(3y)3.95%
ROIC(5y)3.48%
ROICexc(3y)4.12%
ROICexc(5y)3.62%
ROICexgc(3y)4.23%
ROICexgc(5y)3.71%
ROCE(3y)4.56%
ROCE(5y)4.02%
ROICexcg growth 3Y16.53%
ROICexcg growth 5Y12.62%
ROICexc growth 3Y16.64%
ROICexc growth 5Y12.6%
OM growth 3Y11.49%
OM growth 5Y10.66%
PM growth 3Y13.73%
PM growth 5Y14.22%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.14
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.29 | ||
| Debt/FCF | 3.13 | ||
| Debt/EBITDA | 1.39 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 24.68 | ||
| Cash Conversion | 44.96% | ||
| Profit Quality | 68.1% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score4
WACC8.18%
ROIC/WACC0.41
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)70.18%
Profit Quality(5y)90.4%
High Growth Momentum
Growth
EPS 1Y (TTM)13.34%
EPS 3Y6.78%
EPS 5Y10.21%
EPS Q2Q%0%
EPS Next Y-5.99%
EPS Next 2Y0.1%
EPS Next 3Y1.58%
EPS Next 5Y3.33%
Revenue 1Y (TTM)-12.66%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%-37.49%
Revenue Next Year0.92%
Revenue Next 2Y0.85%
Revenue Next 3Y1.35%
Revenue Next 5Y2.14%
EBIT growth 1Y-26.94%
EBIT growth 3Y5.83%
EBIT growth 5Y7.05%
EBIT Next Year74.61%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-26.45%
FCF growth 3Y-18.77%
FCF growth 5Y-13.08%
OCF growth 1Y-26.45%
OCF growth 3Y-18.77%
OCF growth 5Y-13.08%