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AFLAC INC (AFL) Stock Fundamental Analysis

NYSE:AFL - New York Stock Exchange, Inc. - US0010551028 - Common Stock

105  -1.39 (-1.31%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to AFL. AFL was compared to 143 industry peers in the Insurance industry. While AFL belongs to the best of the industry regarding profitability, there are concerns on its financial health. AFL is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year AFL was profitable.
AFL had a positive operating cash flow in the past year.
Each year in the past 5 years AFL has been profitable.
In the past 5 years AFL always reported a positive cash flow from operatings.
AFL Yearly Net Income VS EBIT VS OCF VS FCFAFL Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

1.2 Ratios

AFL has a better Return On Assets (2.97%) than 63.12% of its industry peers.
AFL's Return On Equity of 15.34% is fine compared to the rest of the industry. AFL outperforms 65.25% of its industry peers.
With a decent Return On Invested Capital value of 3.35%, AFL is doing good in the industry, outperforming 67.38% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AFL is in line with the industry average of 4.61%.
Industry RankSector Rank
ROA 2.97%
ROE 15.34%
ROIC 3.35%
ROA(3y)3.2%
ROA(5y)2.93%
ROE(3y)18.35%
ROE(5y)16.14%
ROIC(3y)3.5%
ROIC(5y)3.17%
AFL Yearly ROA, ROE, ROICAFL Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20

1.3 Margins

The Profit Margin of AFL (22.02%) is better than 86.52% of its industry peers.
AFL's Profit Margin has improved in the last couple of years.
The Operating Margin of AFL (27.54%) is better than 91.49% of its industry peers.
AFL's Operating Margin has improved in the last couple of years.
Industry RankSector Rank
OM 27.54%
PM (TTM) 22.02%
GM N/A
OM growth 3Y13.66%
OM growth 5Y8.26%
PM growth 3Y4.91%
PM growth 5Y13.25%
GM growth 3YN/A
GM growth 5YN/A
AFL Yearly Profit, Operating, Gross MarginsAFL Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 5 10 15 20 25

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3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AFL is destroying value.
Compared to 1 year ago, AFL has less shares outstanding
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.
AFL Yearly Shares OutstandingAFL Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M
AFL Yearly Total Debt VS Total AssetsAFL Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 50B 100B 150B

2.2 Solvency

The Debt to FCF ratio of AFL is 2.45, which is a good value as it means it would take AFL, 2.45 years of fcf income to pay off all of its debts.
AFL has a Debt to FCF ratio (2.45) which is in line with its industry peers.
AFL has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
AFL's Debt to Equity ratio of 0.32 is in line compared to the rest of the industry. AFL outperforms 46.10% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.32
Debt/FCF 2.45
Altman-Z N/A
ROIC/WACC0.39
WACC8.49%
AFL Yearly LT Debt VS Equity VS FCFAFL Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A
AFL Yearly Current Assets VS Current LiabilitesAFL Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B

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3

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 7.64% over the past year.
The Earnings Per Share has been growing by 8.67% on average over the past years. This is quite good.
Looking at the last year, AFL shows a decrease in Revenue. The Revenue has decreased by -8.64% in the last year.
Measured over the past years, AFL shows a decrease in Revenue. The Revenue has been decreasing by -3.05% on average per year.
EPS 1Y (TTM)7.64%
EPS 3Y8.14%
EPS 5Y8.67%
EPS Q2Q%17.39%
Revenue 1Y (TTM)-8.64%
Revenue growth 3Y-5.48%
Revenue growth 5Y-3.05%
Sales Q2Q%-40.42%

3.2 Future

AFL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.64% yearly.
Based on estimates for the next years, AFL will show a small growth in Revenue. The Revenue will grow by 0.29% on average per year.
EPS Next Y17.36%
EPS Next 2Y6.55%
EPS Next 3Y5.62%
EPS Next 5Y5.64%
Revenue Next Year-5.75%
Revenue Next 2Y-2.2%
Revenue Next 3Y-1.03%
Revenue Next 5Y0.29%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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.
AFL Yearly Revenue VS EstimatesAFL Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 5B 10B 15B 20B
AFL Yearly EPS VS EstimatesAFL Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2 4 6

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4

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 15.22, the valuation of AFL can be described as correct.
AFL's Price/Earnings is on the same level as the industry average.
AFL is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 14.77, AFL is valued correctly.
Based on the Price/Forward Earnings ratio, AFL is valued a bit more expensive than 60.99% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AFL to the average of the S&P500 Index (24.44), we can say AFL is valued slightly cheaper.
Industry RankSector Rank
PE 15.22
Fwd PE 14.77
AFL Price Earnings VS Forward Price EarningsAFL Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

AFL's Enterprise Value to EBITDA ratio is in line with the industry average.
AFL's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AFL is more expensive than 60.99% of the companies in the same industry.
Industry RankSector Rank
P/FCF 18.19
EV/EBITDA 10.94
AFL Per share dataAFL EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

AFL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of AFL may justify a higher PE ratio.
PEG (NY)0.88
PEG (5Y)1.75
EPS Next 2Y6.55%
EPS Next 3Y5.62%

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6

5. Dividend

5.1 Amount

AFL has a Yearly Dividend Yield of 2.19%.
AFL's Dividend Yield is a higher than the industry average which is at 2.99.
AFL's Dividend Yield is comparable with the S&P500 average which is at 2.28.
Industry RankSector Rank
Dividend Yield 2.19%

5.2 History

On average, the dividend of AFL grows each year by 9.41%, 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)9.41%
Div Incr Years34
Div Non Decr Years34
AFL Yearly Dividends per shareAFL Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.5 1 1.5

5.3 Sustainability

27.72% 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.
DP27.72%
EPS Next 2Y6.55%
EPS Next 3Y5.62%
AFL Yearly Income VS Free CF VS DividendAFL Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B
AFL Dividend Payout.AFL Dividend Payout, showing the Payout Ratio.AFL Dividend Payout.PayoutRetained Earnings

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AFLAC INC

NYSE:AFL (1/22/2025, 2:08:00 PM)

105

-1.39 (-1.31%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)10-30 2024-10-30/amc
Earnings (Next)02-05 2025-02-05/amc
Inst Owners61.92%
Inst Owner Change0.02%
Ins Owners0.73%
Ins Owner Change-3.2%
Market Cap58.33B
Analysts66.32
Price Target107.89 (2.75%)
Short Float %1.45%
Short Ratio3.53
Dividend
Industry RankSector Rank
Dividend Yield 2.19%
Yearly Dividend1.62
Dividend Growth(5Y)9.41%
DP27.72%
Div Incr Years34
Div Non Decr Years34
Ex-Date02-19 2025-02-19 (0.58)
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)20.11%
Min EPS beat(2)13.31%
Max EPS beat(2)26.91%
EPS beat(4)3
Avg EPS beat(4)7.29%
Min EPS beat(4)-14.93%
Max EPS beat(4)26.91%
EPS beat(8)7
Avg EPS beat(8)10.9%
EPS beat(12)9
Avg EPS beat(12)8.03%
EPS beat(16)13
Avg EPS beat(16)10.05%
Revenue beat(2)1
Avg Revenue beat(2)-8.04%
Min Revenue beat(2)-34%
Max Revenue beat(2)17.93%
Revenue beat(4)2
Avg Revenue beat(4)-1.47%
Min Revenue beat(4)-34%
Max Revenue beat(4)25.28%
Revenue beat(8)5
Avg Revenue beat(8)1.32%
Revenue beat(12)9
Avg Revenue beat(12)2.17%
Revenue beat(16)12
Avg Revenue beat(16)2.36%
PT rev (1m)0%
PT rev (3m)7.02%
EPS NQ rev (1m)0%
EPS NQ rev (3m)3.7%
EPS NY rev (1m)0%
EPS NY rev (3m)7.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.92%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)-4.64%
Valuation
Industry RankSector Rank
PE 15.22
Fwd PE 14.77
P/S 3.37
P/FCF 18.19
P/OCF 18.19
P/B 2.35
P/tB 2.35
EV/EBITDA 10.94
EPS(TTM)6.9
EY6.57%
EPS(NY)7.11
Fwd EY6.77%
FCF(TTM)5.77
FCFY5.5%
OCF(TTM)5.77
OCFY5.5%
SpS31.14
BVpS44.7
TBVpS44.7
PEG (NY)0.88
PEG (5Y)1.75
Profitability
Industry RankSector Rank
ROA 2.97%
ROE 15.34%
ROCE 3.73%
ROIC 3.35%
ROICexc 3.5%
ROICexgc 3.57%
OM 27.54%
PM (TTM) 22.02%
GM N/A
FCFM 18.54%
ROA(3y)3.2%
ROA(5y)2.93%
ROE(3y)18.35%
ROE(5y)16.14%
ROIC(3y)3.5%
ROIC(5y)3.17%
ROICexc(3y)3.61%
ROICexc(5y)3.27%
ROICexgc(3y)3.71%
ROICexgc(5y)3.36%
ROCE(3y)3.89%
ROCE(5y)3.52%
ROICexcg growth 3Y16.34%
ROICexcg growth 5Y6.59%
ROICexc growth 3Y16.35%
ROICexc growth 5Y6.6%
OM growth 3Y13.66%
OM growth 5Y8.26%
PM growth 3Y4.91%
PM growth 5Y13.25%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.13
Health
Industry RankSector Rank
Debt/Equity 0.32
Debt/FCF 2.45
Debt/EBITDA 1.4
Cap/Depr N/A
Cap/Sales N/A
Interest Coverage 26.47
Cash Conversion 57.16%
Profit Quality 84.2%
Current Ratio N/A
Quick Ratio N/A
Altman-Z N/A
F-Score4
WACC8.49%
ROIC/WACC0.39
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)92.53%
Profit Quality(5y)113.48%
High Growth Momentum
Growth
EPS 1Y (TTM)7.64%
EPS 3Y8.14%
EPS 5Y8.67%
EPS Q2Q%17.39%
EPS Next Y17.36%
EPS Next 2Y6.55%
EPS Next 3Y5.62%
EPS Next 5Y5.64%
Revenue 1Y (TTM)-8.64%
Revenue growth 3Y-5.48%
Revenue growth 5Y-3.05%
Sales Q2Q%-40.42%
Revenue Next Year-5.75%
Revenue Next 2Y-2.2%
Revenue Next 3Y-1.03%
Revenue Next 5Y0.29%
EBIT growth 1Y-16.45%
EBIT growth 3Y7.43%
EBIT growth 5Y4.95%
EBIT Next Year7.74%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-13.7%
FCF growth 3Y-18.8%
FCF growth 5Y-11.91%
OCF growth 1Y-13.7%
OCF growth 3Y-18.8%
OCF growth 5Y-11.91%