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| AFLAC |
Company Description: Aflac Incorporated provides supplemental physical condition and life insurance in the U.S. And Japan. Products are marketed by the side of worksites and help fill gaps in primary insurance coverage. Approximately 75% of revenues comes from Japan and 25% from the U.S.
Fair Value: I consider four calculations of average quantity, find out call 2 of the linked PDF in place of a detailed account:
1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number
AFL is trading by the side of a disregard to solitary 3.) beyond. The routine is trading by the side of a 31.4% premium to its calculated average quantity of $43.46. AFL did not earn some Stars in this section.
Dividend Analytical Data: Clothed in this section near are three promising Stars and three type metrics, find out call 2 of the linked PDF in place of a detailed account:
1. Free coins 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 three Stars in this section in place of 1.), 2.) and 3.) beyond. A Star was earned since the Free coins Flow payout ratio was a smaller amount than 60% and near were rebuff harmful Free coins Flows on the carry on 10 years. The routine earned a Star as a answer of its nearly everyone topical Debt to Total Capital being a smaller amount than 45%. AFL earned a Star in place of having an acceptable slash in by the side of smallest amount two of the four Key Metrics measured. Rolling 4-yr Div. > 15% channel with the aim of dividends grew on usual in glut of 15% in place of both consecutive 4 time episode on the carry on 10 years (2000-2003, 2001-2004, 2002-2005, et cetera.) I consider this a type metric since dividends will multiply by two each 5 years if they grow by 15%. The company has paid a cash dividend to shareholders each time since 1973 and has increased its dividend payments in place of 28 consecutive years.
Dividend Income v. MMA: Why would you affect the justness venture and invest in a dividend routine if you may well earn a better return in a much a smaller amount risky money marketplace tally (MMA)? This section compares the earning capability of this routine with a prohibitive yield MMA. Two items are considered in this section, find out call 2 of the linked PDF in place of a detailed account:
1. NPV MMA Diff.
2. Years to > MMA
AFL earned a Star in this section in place of its NPV MMA Diff. Of the $2,621. This amount is in glut of the $700 target I look in place of in a routine with the aim of has increased dividends as long as AFL has. If AFL grows its dividend by the side of 15.0% apiece time, it will take 5 years to equal a MMA compliant an estimated 20-year usual rate of 3.4%.
Memberships and Peers: AFL is a organ of the S&P 500, a Dividend Aristocrat and a organ of the Broad Dividend Achievers™ Index. The company’s peer set includes: Delphi Financial Group, Inc. (DFG) with a 1.5% yield, Unum Group (UNM) with a 1.5% yield and CNO Financial Group (CNO) with a 0.0% yield.
Conclusion: AFL did not earn some Stars in the Fair Value section, earned three Stars in the Dividend Analytical Data section and earned single Star in the Dividend Income v. MMA section in place of a calculate of four Stars. This quantitatively ranks AFL as a 4 Star-Buy.
Using my D4L-PreScreen.Xls classic, I dogged the share charge would need to increase in intensity to $93.51 by AFL’s NPV MMA Differential decreased to the $700 most minuscule with the aim of I look in place of in a routine with 28 years of consecutive dividend increases. At with the aim of charge the routine would yield 1.22%.
Resetting the D4L-PreScreen.Xls classic and solving in place of the dividend growth rate desired to generate the target $700 NPV MMA Differential, the calculated rate is 10.5%. This dividend growth rate is underneath the 16.7% used in this analysis, like so only if a margin of safety. AFL has a venture rating of 1.50 which classifies it as a low venture routine.
Operating in the the U.S. And Japan, two chief insurance markets in the humankind, AFL has built a tremendous low-cost distribution organization. Concerns not far off from AFLs investment portfolio, which holds European stack hybrid bonds and European supreme ruler debt, maintain eased. However, deregulation in Japan has permitted more able competitors to enter Aflac’s type markets and a prolonged episode of low consequence tax diminish the company’s prospects. AFL’s is trading 31% beyond my average quantity good buy charge of $43.46. It valuation, low yield and readiness to last its dividend plane, as it did from Feb. 2009 to majestic 2010, will keep shares of this routine barred of my portfolio. For other in turn, together with the stock’s dividend history, please refer to its data call.
Disclaimer: Material presented at this point is in place of informational purposes solitary. The beyond quantitative routine analysis, together with the Star rating, is mechanically calculated and is based on historical in turn. The analysis assumes the routine will run in the opportunity as it has in the ancient. This is in the main in no way factual. Before trade or promotion some routine you ought to resolve your own explore and extent your own conclusion. See my Disclaimer in place of more in turn.
Full Disclosure: At the schedule of this symbols, I held rebuff perception in AFL (0.0% of my Income Portfolio). See a file of all my takings assets at this point.