An In-Depth Look at Aflac Inc's Upcoming Dividend and Its Historical Performance
Aflac Inc (AFL, Financial) recently announced a dividend of $0.42 per share, payable on 2023-12-01, with the ex-dividend date set for 2023-11-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Aflac Inc's dividend performance and assess its sustainability.
What Does Aflac Inc Do?
Aflac Inc offers supplemental health insurance and life insurance in the two largest insurance markets in the world, the U.S. and Japan. In addition to its cancer policies, the company has broadened its product offerings to include accident, disability, and long-term-care insurance. It markets its products through independent distributors, selling most of its policies directly to consumers at their places of work.
A Glimpse at Aflac Inc's Dividend History
Aflac Inc has maintained a consistent dividend payment record since 1983. Dividends are currently distributed on a quarterly basis. Aflac Inc has increased its dividend each year since 1983. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 40 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Aflac Inc's Dividend Yield and Growth
As of today, Aflac Inc currently has a 12-month trailing dividend yield of 2.04% and a 12-month forward dividend yield of 2.47%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Aflac Inc's annual dividend growth rate was 14.00%. Extended to a five-year horizon, this rate decreased to 11.50% per year. And over the past decade, Aflac Inc's annual dividends per share growth rate stands at 8.40%. Based on Aflac Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Aflac Inc stock as of today is approximately 3.52%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Aflac Inc's dividend payout ratio is 0.23.
Aflac Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Aflac Inc's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Aflac Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Aflac Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Aflac Inc's revenue has increased by approximately 0.90% per year on average, a rate that underperforms than approximately 63.96% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Aflac Inc's earnings increased by approximately 6.30% per year on average, a rate that underperforms than approximately 43.2% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.00%, which underperforms than approximately 33.9% of global competitors.
Engaging Conclusion: Aflac Inc's Dividend Prospects
In conclusion, Aflac Inc's impressive history as a dividend aristocrat and its consistent dividend growth over the years is noteworthy for value investors. With a reasonable payout ratio and solid profitability, the dividends appear sustainable in the near term. However, investors should keep an eye on the company's growth metrics, as they indicate some areas where Aflac Inc underperforms its peers. While the future is never certain, the data suggests that Aflac Inc is positioned to continue rewarding shareholders with dividends. Will Aflac Inc maintain its status and appeal to dividend-seeking investors in the years to come? This is a question that will unfold with time, and one that savvy investors will watch closely.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
