AFLAC INC (AFL) Stock Fundamental Analysis
NYSE:AFL - New York Stock Exchange, Inc. - US0010551028 - Common Stock - Currency: USD
Taking everything into account, AFL scores 5 out of 10 in our fundamental rating. 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 valied quite expensively at the moment, while it does show a decent growth rate.
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.
Each year in the past 5 years AFL has been profitable.
Each year in the past 5 years AFL had a positive operating cash flow.
1.2 Ratios
AFL has a better Return On Assets (4.63%) than 82.52% of its industry peers.
AFL's Return On Equity of 20.86% is amongst the best of the industry. AFL outperforms 85.31% of its industry peers.
The Return On Invested Capital of AFL (4.91%) is better than 79.72% of its industry peers.
AFL had an Average Return On Invested Capital over the past 3 years of 3.95%. This is in line with the industry average of 4.47%.
The 3 year average ROIC (3.95%) for AFL is below the current ROIC(4.91%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.63% | ||
| ROE | 20.86% | ||
| ROIC | 4.91% |
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 Profit Margin of 28.76%. This is amongst the best in the industry. AFL outperforms 95.80% of its industry peers.
In the last couple of years the Profit Margin of AFL has grown nicely.
The Operating Margin of AFL (34.94%) is better than 95.10% of its industry peers.
In the last couple of years the Operating Margin of AFL has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.94% | ||
| PM (TTM) | 28.76% | ||
| 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
AFL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for AFL has been reduced compared to 1 year ago.
AFL has less shares outstanding than it did 5 years ago.
The debt/assets ratio for AFL is higher compared to a year ago.
2.2 Solvency
AFL has a debt to FCF ratio of 2.74. This is a good value and a sign of high solvency as AFL would need 2.74 years to pay back of all of its debts.
AFL's Debt to FCF ratio of 2.74 is in line compared to the rest of the industry. AFL outperforms 41.26% of its industry peers.
A Debt/Equity ratio of 0.28 indicates that AFL is not too dependend on debt financing.
AFL has a better Debt to Equity ratio (0.28) than 61.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 2.74 | ||
| Altman-Z | N/A |
ROIC/WACC0.6
WACC8.2%
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 15.34% over the past year.
Measured over the past years, AFL shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.21% on average per year.
AFL shows a small growth in Revenue. In the last year, the Revenue has grown by 1.21%.
The Revenue has been decreasing by -3.26% on average over the past years.
EPS 1Y (TTM)15.34%
EPS 3Y6.78%
EPS 5Y10.21%
EPS Q2Q%25.6%
Revenue 1Y (TTM)1.21%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%43.05%
3.2 Future
AFL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.65% yearly.
The Revenue is expected to grow by 2.28% on average over the next years.
EPS Next Y-5.07%
EPS Next 2Y0.34%
EPS Next 3Y1.53%
EPS Next 5Y3.65%
Revenue Next Year4.47%
Revenue Next 2Y2.99%
Revenue Next 3Y1.09%
Revenue Next 5Y2.28%
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.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.54, the valuation of AFL can be described as correct.
AFL's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 28.29. AFL is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 15.31, which indicates a correct valuation of AFL.
60.14% of the companies in the same industry are cheaper than AFL, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of AFL to the average of the S&P500 Index (21.32), we can say AFL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.54 | ||
| Fwd PE | 15.31 |
4.2 Price Multiples
62.24% of the companies in the same industry are more expensive than AFL, based on the Enterprise Value to EBITDA ratio.
AFL's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. AFL is more expensive than 62.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.17 | ||
| EV/EBITDA | 8.01 |
4.3 Compensation for Growth
AFL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.42
EPS Next 2Y0.34%
EPS Next 3Y1.53%
5. Dividend
5.1 Amount
AFL has a Yearly Dividend Yield of 2.16%.
Compared to an average industry Dividend Yield of 3.28, AFL has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.51, AFL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.16% |
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 19.97% 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.
DP19.97%
EPS Next 2Y0.34%
EPS Next 3Y1.53%
104.97
-2.47 (-2.3%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners59.77%
Inst Owner Change0.44%
Ins Owners0.79%
Ins Owner Change3.69%
Market Cap57.29B
Analysts66
Price Target108.04 (2.92%)
Short Float %1.87%
Short Ratio4.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.16% |
Yearly Dividend1.93
Dividend Growth(5Y)13.11%
DP19.97%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)11.44%
Min EPS beat(2)-4.02%
Max EPS beat(2)26.91%
EPS beat(4)3
Avg EPS beat(4)10.02%
Min EPS beat(4)-4.02%
Max EPS beat(4)26.91%
EPS beat(8)6
Avg EPS beat(8)8.6%
EPS beat(12)9
Avg EPS beat(12)7.69%
EPS beat(16)12
Avg EPS beat(16)9.72%
Revenue beat(2)1
Avg Revenue beat(2)-2.77%
Min Revenue beat(2)-34%
Max Revenue beat(2)28.46%
Revenue beat(4)3
Avg Revenue beat(4)9.42%
Min Revenue beat(4)-34%
Max Revenue beat(4)28.46%
Revenue beat(8)6
Avg Revenue beat(8)6.31%
Revenue beat(12)9
Avg Revenue beat(12)4.28%
Revenue beat(16)12
Avg Revenue beat(16)3.7%
PT rev (1m)0.51%
PT rev (3m)0.15%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)-6.89%
EPS NY rev (1m)-0.62%
EPS NY rev (3m)-3.55%
Revenue NQ rev (1m)-5.53%
Revenue NQ rev (3m)-2.7%
Revenue NY rev (1m)0.4%
Revenue NY rev (3m)2.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.54 | ||
| Fwd PE | 15.31 | ||
| P/S | 3.03 | ||
| P/FCF | 21.17 | ||
| P/OCF | 21.17 | ||
| P/B | 2.2 | ||
| P/tB | 2.2 | ||
| EV/EBITDA | 8.01 |
EPS(TTM)7.22
EY6.88%
EPS(NY)6.85
Fwd EY6.53%
FCF(TTM)4.96
FCFY4.72%
OCF(TTM)4.96
OCFY4.72%
SpS34.68
BVpS47.82
TBVpS47.82
PEG (NY)N/A
PEG (5Y)1.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.63% | ||
| ROE | 20.86% | ||
| ROCE | 5.66% | ||
| ROIC | 4.91% | ||
| ROICexc | 5.18% | ||
| ROICexgc | 5.31% | ||
| OM | 34.94% | ||
| PM (TTM) | 28.76% | ||
| GM | N/A | ||
| FCFM | 14.3% |
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-Score7
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.28 | ||
| Debt/FCF | 2.74 | ||
| Debt/EBITDA | 0.98 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 36.74 | ||
| Cash Conversion | 36.27% | ||
| Profit Quality | 49.73% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score7
WACC8.2%
ROIC/WACC0.6
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)15.34%
EPS 3Y6.78%
EPS 5Y10.21%
EPS Q2Q%25.6%
EPS Next Y-5.07%
EPS Next 2Y0.34%
EPS Next 3Y1.53%
EPS Next 5Y3.65%
Revenue 1Y (TTM)1.21%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%43.05%
Revenue Next Year4.47%
Revenue Next 2Y2.99%
Revenue Next 3Y1.09%
Revenue Next 5Y2.28%
EBIT growth 1Y21.18%
EBIT growth 3Y5.83%
EBIT growth 5Y7.05%
EBIT Next Year86.7%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-15.14%
FCF growth 3Y-18.77%
FCF growth 5Y-13.08%
OCF growth 1Y-15.14%
OCF growth 3Y-18.77%
OCF growth 5Y-13.08%