AFLAC INC (AFL) Stock Fundamental Analysis
NYSE:AFL - New York Stock Exchange, Inc. - US0010551028 - Common Stock - Currency: USD
Taking everything into account, AFL scores 4 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 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.
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.
1.2 Ratios
AFL has a better Return On Assets (2.99%) than 69.93% of its industry peers.
AFL has a Return On Equity of 13.64%. This is in the better half of the industry: AFL outperforms 67.13% of its industry peers.
The Return On Invested Capital of AFL (3.34%) is better than 70.63% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AFL is in line with the industry average of 4.13%.
| 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
AFL has a better Profit Margin (21.28%) than 92.31% of its industry peers.
AFL's Profit Margin has improved in the last couple of years.
AFL has a better Operating Margin (27.18%) than 92.31% of its industry peers.
In the last couple of years the Operating Margin of AFL has grown nicely.
| 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.
Compared to 1 year ago, AFL has less shares outstanding
Compared to 5 years ago, AFL has less shares outstanding
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 62.24% of its industry peers.
A Debt/Equity ratio of 0.29 indicates that AFL is not too dependend on debt financing.
AFL has a Debt to Equity ratio (0.29) which 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/WACC0.4
WACC8.33%
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.
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 very negative growth in Revenue. In the last year, the Revenue has decreased by -12.66%.
Measured over the past years, AFL shows a decrease in Revenue. The Revenue has been decreasing by -3.26% on average per year.
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
AFL is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.65% yearly.
AFL is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.28% yearly.
EPS Next Y-6.03%
EPS Next 2Y0.28%
EPS Next 3Y1.83%
EPS Next 5Y3.65%
Revenue Next Year-0.7%
Revenue Next 2Y0.54%
Revenue Next 3Y1.08%
Revenue Next 5Y2.28%
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
The Price/Earnings ratio is 14.20, which indicates a correct valuation of AFL.
The rest of the industry has a similar Price/Earnings ratio as AFL.
Compared to an average S&P500 Price/Earnings ratio of 25.91, AFL is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 14.12, the valuation of AFL can be described as correct.
60.14% 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 21.77.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.2 | ||
| Fwd PE | 14.12 |
4.2 Price Multiples
AFL's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AFL indicates a slightly more expensive valuation: AFL is more expensive than 72.03% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.65 | ||
| EV/EBITDA | 10.63 |
4.3 Compensation for Growth
AFL has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.39
EPS Next 2Y0.28%
EPS Next 3Y1.83%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.24%, AFL has a reasonable but not impressive dividend return.
AFL's Dividend Yield is a higher than the industry average which is at 3.23.
Compared to an average S&P500 Dividend Yield of 2.40, AFL has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
5.2 History
On average, the dividend of AFL grows each year by 13.11%, which is quite nice.
AFL has been paying a dividend for at least 10 years, so it has 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
31.03% of the earnings are spent on dividend by AFL. This is a low number and sustainable payout ratio.
The dividend of AFL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP31.03%
EPS Next 2Y0.28%
EPS Next 3Y1.83%
102.53
+0.08 (+0.08%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners59.77%
Inst Owner Change-1.27%
Ins Owners0.79%
Ins Owner Change3.05%
Market Cap55.43B
Analysts66.32
Price Target108.21 (5.54%)
Short Float %1.64%
Short Ratio3.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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)0.15%
PT rev (3m)0.15%
EPS NQ rev (1m)-0.81%
EPS NQ rev (3m)-1.67%
EPS NY rev (1m)-1.01%
EPS NY rev (3m)-1.63%
Revenue NQ rev (1m)-4.64%
Revenue NQ rev (3m)-5.24%
Revenue NY rev (1m)-1.26%
Revenue NY rev (3m)-4.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.2 | ||
| Fwd PE | 14.12 | ||
| P/S | 3.28 | ||
| P/FCF | 22.65 | ||
| P/OCF | 22.65 | ||
| P/B | 2.1 | ||
| P/tB | 2.13 | ||
| EV/EBITDA | 10.63 |
EPS(TTM)7.22
EY7.04%
EPS(NY)7.26
Fwd EY7.08%
FCF(TTM)4.53
FCFY4.41%
OCF(TTM)4.53
OCFY4.41%
SpS31.24
BVpS48.72
TBVpS48.23
PEG (NY)N/A
PEG (5Y)1.39
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
WACC8.33%
ROIC/WACC0.4
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-6.03%
EPS Next 2Y0.28%
EPS Next 3Y1.83%
EPS Next 5Y3.65%
Revenue 1Y (TTM)-12.66%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%-37.49%
Revenue Next Year-0.7%
Revenue Next 2Y0.54%
Revenue Next 3Y1.08%
Revenue Next 5Y2.28%
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%