AFL gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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. AFL also has an excellent dividend rating.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year AFL was profitable.
In the past year AFL had a positive cash flow from operations.
Each year in the past 5 years AFL has been profitable.
AFL had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

AFL has a Return On Assets of 3.41%. This is in the better half of the industry: AFL outperforms 69.59% of its industry peers.
The Return On Equity of AFL (14.53%) is better than 68.92% of its industry peers.
With a decent Return On Invested Capital value of 3.81%, AFL is doing good in the industry, outperforming 65.54% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for AFL 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

With an excellent Profit Margin value of 23.55%, AFL belongs to the best of the industry, outperforming 94.59% 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 29.97%, AFL belongs to the best of the industry, outperforming 91.89% of the companies in the same industry.
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

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ROA

ROE

ROIC

Operating and Profit Margin

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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.
AFL has less shares outstanding than it did 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 3.34, which is a good value as it means it would take AFL, 3.34 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of AFL (3.34) is comparable to the rest of the 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 of 0.30. This is comparable to the rest of the industry: AFL outperforms 54.05% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.3
Debt/FCF	3.34
Altman-Z	N/A

ROIC/WACC0.47

WACC8.14%

2.3 Liquidity

		Industry Rank	Sector Rank
Current Ratio	N/A
Quick Ratio	N/A

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WACC

Debt/Equity

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Altman-Z score

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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.
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.
Looking at the last year, AFL shows a small growth in Revenue. The Revenue has grown by 2.32% in the last year.
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)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

The Earnings Per Share is expected to grow by 4.12% 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 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.

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4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 14.79, the valuation of AFL can be described as correct.
AFL's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 28.32. AFL is valued slightly cheaper when compared to this.
AFL is valuated correctly with a Price/Forward Earnings ratio of 14.97.
AFL's Price/Forward Earnings ratio is a bit more expensive when compared to the industry. AFL is more expensive than 62.16% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, AFL is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	14.79
Fwd PE	14.97

4.2 Price Multiples

The rest of the industry has a similar Enterprise Value to EBITDA ratio as AFL.
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	22.6
EV/EBITDA	9.72

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of AFL may justify a higher PE ratio.

PEG (NY)2.26

PEG (5Y)1.45

EPS Next 2Y1.32%

EPS Next 3Y2.93%

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5. Dividend

5.1 Amount

AFL has a Yearly Dividend Yield of 2.21%.
AFL's Dividend Yield is a higher than the industry average which is at 2.23.
AFL's Dividend Yield is a higher than the S&P500 average which is at 1.83.

		Industry Rank	Sector Rank
Dividend Yield	2.21%

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 28.14% of its income as dividend. This is a sustainable payout ratio.
The dividend of AFL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.

DP28.14%

EPS Next 2Y1.32%

EPS Next 3Y2.93%

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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.