AFLAC INC (AFL) Stock Fundamental Analysis
NYSE:AFL - New York Stock Exchange, Inc. - US0010551028 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to AFL. AFL was compared to 143 industry peers in the Insurance industry. AFL scores excellent on profitability, but there are concerns on its financial health. While showing a medium growth rate, AFL is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
AFL had positive earnings in the past year.
In the past year AFL had a positive cash flow from operations.
AFL had positive earnings in each of the past 5 years.
In the past 5 years AFL always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.63%, AFL belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
AFL has a better Return On Equity (20.86%) than 87.41% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.91%, AFL belongs to the top of the industry, outperforming 80.42% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AFL is in line with the industry average of 4.47%.
The last Return On Invested Capital (4.91%) for AFL is above the 3 year average (3.95%), which is a sign of increasing profitability.
| 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.
AFL's Profit Margin has improved in the last couple of years.
AFL's Operating Margin of 34.94% is amongst the best of the industry. AFL outperforms 95.80% of its industry peers.
AFL's Operating Margin has improved in the last couple of years.
| 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.
Compared to 1 year ago, AFL has a worse debt to assets ratio.
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 has a Debt to FCF ratio of 2.74. This is comparable to the rest of the industry: AFL outperforms 43.36% of its industry peers.
AFL has a Debt/Equity ratio of 0.28. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.28, AFL is doing good in the industry, outperforming 60.84% of the companies in the same industry.
| 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 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 small growth in Revenue. The Revenue has grown by 1.21% 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)1.21%
Revenue growth 3Y-5.07%
Revenue growth 5Y-3.26%
Sales Q2Q%-20.53%
3.2 Future
The Earnings Per Share is expected to grow by 3.65% 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 2.28% yearly.
EPS Next Y-5.07%
EPS Next 2Y0.34%
EPS Next 3Y1.53%
EPS Next 5Y3.65%
Revenue Next Year0.57%
Revenue Next 2Y0.92%
Revenue Next 3Y1.09%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
AFL is valuated correctly with a Price/Earnings ratio of 14.62.
Compared to the rest of the industry, the Price/Earnings ratio of AFL is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.22, AFL is valued a bit cheaper.
A Price/Forward Earnings ratio of 14.52 indicates a correct valuation of AFL.
Based on the Price/Forward Earnings ratio, AFL is valued a bit more expensive than 60.14% of the companies in the same industry.
AFL is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.62 | ||
| Fwd PE | 14.52 |
4.2 Price Multiples
AFL's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AFL is cheaper than 61.54% of the companies in the same industry.
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 64.34% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.28 | ||
| EV/EBITDA | 7.87 |
4.3 Compensation for Growth
AFL has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.43
EPS Next 2Y0.34%
EPS Next 3Y1.53%
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 comparable with the industry average which is at 3.27.
AFL's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
5.2 History
The dividend of AFL is nicely growing with an annual growth rate of 13.11%!
AFL has been paying a dividend for at least 10 years, so it has 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
19.97% 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.
DP19.97%
EPS Next 2Y0.34%
EPS Next 3Y1.53%
105.53
+2.01 (+1.94%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners59.77%
Inst Owner Change-0.05%
Ins Owners0.79%
Ins Owner Change3.69%
Market Cap57.60B
Analysts66.32
Price Target108.46 (2.78%)
Short Float %1.74%
Short Ratio4.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.24% |
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)0.39%
PT rev (3m)-0.41%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)-3.46%
EPS NY rev (1m)0.09%
EPS NY rev (3m)-3.18%
Revenue NQ rev (1m)-5.53%
Revenue NQ rev (3m)-1.62%
Revenue NY rev (1m)-3.42%
Revenue NY rev (3m)-0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.62 | ||
| Fwd PE | 14.52 | ||
| P/S | 3.04 | ||
| P/FCF | 21.28 | ||
| P/OCF | 21.28 | ||
| P/B | 2.21 | ||
| P/tB | 2.21 | ||
| EV/EBITDA | 7.87 |
EPS(TTM)7.22
EY6.84%
EPS(NY)7.27
Fwd EY6.89%
FCF(TTM)4.96
FCFY4.7%
OCF(TTM)4.96
OCFY4.7%
SpS34.68
BVpS47.82
TBVpS47.82
PEG (NY)N/A
PEG (5Y)1.43
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)13.34%
EPS 3Y6.78%
EPS 5Y10.21%
EPS Q2Q%0%
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%-20.53%
Revenue Next Year0.57%
Revenue Next 2Y0.92%
Revenue Next 3Y1.09%
Revenue Next 5Y2.28%
EBIT growth 1Y21.18%
EBIT growth 3Y5.83%
EBIT growth 5Y7.05%
EBIT Next Year74.61%
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%