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Aflac Dividend Stock forecast

Aflac Dividend Stock forecast
Aflac Dividend Stock forecast : Aflac Incorporated provides supplemental wellness as well as life insurance inwards Nippon (80% of earnings) as well as the U.S. of A. Products are marketed at endure sites as well as assist fill upward gaps inwards primary coverage.

Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along amongst these 4 calculations of fair value, encounter page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

AFL is trading at a discount to 3.) as well as 4.) above. The stock is trading at a 16.2% discount to its calculated fair value of $61.44. AFL earned a Star inwards this department since it is trading at a fair value.

Dividend Analytical Data: In this department in that location are 3 possible Stars as well as 3 fundamental metrics, encounter page 2 of the linked PDF for a detailed description:

1. Free Cash Flow Payout
2. Debt To Total Capital
3. Key Metrics
4. Dividend Growth Rate
5. Years of Div. Growth
6. Rolling 4-yr Div. > 15%

AFL earned 3 Stars inwards this department for 1.), 2.) as well as 3.) above. H5N1 Star was earned since the Free Cash Flow payout ratio was less than 60% as well as in that location were no negative Free Cash Flows over the concluding 10 years. The stock earned a Star every bit a resultant of its well-nigh recent Debt to Total Capital beingness less than 45%. AFL earned a Star for having an acceptable score inwards at to the lowest degree ii of the 4 Key Metrics measured. The society has paid a cash dividend to shareholders every yr since 1973 as well as has increased its dividend payments for thirty consecutive years.

Dividend Income vs. MMA: Why would you lot assume the equity adventure as well as invest inwards a dividend stock if you lot could earn a improve render inwards a much less risky coin marketplace draw of piece of employment organisation human relationship (MMA) or Treasury bond? This department compares the earning might of this stock amongst a high yield MMA. Two items are considered inwards this section, encounter page 2 of the linked PDF for a detailed description:

1. NPV MMA Diff.
2. Years to > MMA

AFL earned a Star inwards this department for its NPV MMA Diff. of the $992. This amount is inwards excess of the $500 target I hold off for inwards a stock that has increased dividends every bit long every bit AFL has. The stock's electrical flow yield of 2.6% exceeds the 2.54% estimated 20-year average MMA rate.

Memberships as well as Peers: AFL is a fellow member of the S&P 500, a Dividend Aristocrat, a fellow member of the Broad Dividend Achievers™ Index as well as a Dividend Champion. The company's peer grouping includes: American Independence Corp. (AMIC) amongst a 0.0% yield, Unum Group (UNM) amongst a 2.3% yield as well as CNO Financial Group, Inc. (CNO) amongst a 0.8% yield.

Conclusion: AFL earned 1 Star inwards the Fair Value section, earned 3 Stars inwards the Dividend Analytical Data department as well as earned 1 Star inwards the Dividend Income vs. MMA department for a full of 5 Stars. This quantitatively ranks AFL every bit a 5-Star Very Strong stock.

Using my D4L-PreScreen.xls model, I determined the share price would require to increment to $51.47 earlier AFL's NPV MMA Differential decreased to the $500 minimum that I hold off for inwards a stock amongst thirty years of consecutive dividend increases. At that toll the stock would yield 2.6%.

Resetting the D4L-PreScreen.xls model as well as solving for the dividend growth charge per unit of measurement needed to generate the target $500 NPV MMA Differential, the calculated charge per unit of measurement is 5.3%. This dividend growth charge per unit of measurement is lower than the 7.9% used inwards this analysis, hence providing a margin of safety. AFL has a adventure rating of 1.25 which classifies it every bit a Low adventure stock.

Operating inwards the ii largest insurance markets inwards the footing (U.S. as well as Japan), AFL has built a tremendous low-cost distribution system. Focusing on supplemental insurance products, AFL consistently generate excess returns for shareholders. Consistent earnings has allowed the society to increment its dividend as well as repurchase shares.

Despite a rigid draw of piece of employment organisation model, the AFL's residue canvas remains stressed due to questions over about of its investments, specifically European banking concern hybrid bonds as well as European sovereign debt. The society has taken steps to de-risk its investment portfolio. This motion will likely deadening lucre growth over the adjacent few years, but should atomic number 82 to higher long-term value.

AFL is currently trading at a discount versus its historical valuation. The society is trading below my calculated fair value toll of $61.44. However, a recent runup inwards its percentage toll has lowered the stocks yield, as well as so for instantly I volition hold off on a to a greater extent than attractive entry yell for earlier adding to my position.

Disclaimer: Material presented hither is for informational purposes only. The higher upward quantitative stock analysis, including the Star rating, is mechanically calculated as well as is based on historical information. The analysis assumes the stock volition perform inwards the hereafter every bit it has inwards the past. This is mostly never true. Before buying or selling whatsoever stock you lot should produce your ain enquiry as well as achieve your ain conclusion. See my Disclaimer for to a greater extent than information. Disclosure: At the fourth dimension of this writing, I was long inwards AFL (1.5% of my Dividend Growth Portfolio).source :

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