July 04, 2025 a 03:31 am
AFL: Dividend Analysis - Aflac Incorporated
Aflac Incorporated presents a compelling case for dividend investors with its steady payout history and prudent growth. With over four decades of uninterrupted dividend growth and a current yield that surpasses the industry average, Aflac's dividend profile remains robust. The company exhibits sound financial metrics with sustainable payout ratios, demonstrating financial stability and a commitment to returning value to shareholders. As an insurance leader in diversified sectors, Aflac's resilience is further evidenced by its strategic positioning within the financial markets.
📊 Overview
Aflac Incorporated is categorized within the Financial Services sector, contributing to its strong dividend profile. A key highlight is its dividend yield of 2.09%, providing an attractive return for income-oriented investors. The company's current dividend per share stands at 1.95 USD, with a remarkable dividend history spanning 42 years, showcasing stability and reliability in its dividend policy. Notably, Aflac has not experienced any dividend cuts or suspensions, making it a dependable choice for long-term investment.
| Aspect | Detail |
|---|---|
| Sector | Financial Services |
| Dividend yield | 2.09 % |
| Current dividend per share | 1.95 USD |
| Dividend history | 42 years |
| Last cut or suspension | None |
🗣️ Dividend History
Understanding Aflac's dividend history reveals its commitment to rewarding shareholders through consistent and growing payouts. This is a vital indicator of a company's business health and its management's confidence in future earnings.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.16 |
| 2024 | 2.0 |
| 2023 | 1.68 |
| 2022 | 1.6 |
| 2021 | 1.32 |
📈 Dividend Growth
Aflac's dividend growth metrics highlight its capability to increase shareholder returns. Over the last three years, the dividend growth rate is 14.86%, while over the past five years, it stands at 13.12%. This consistent growth underscores management's confidence in the business's cash-generating abilities.
| Time | Growth |
|---|---|
| 3 years | 14.86 % |
| 5 years | 13.12 % |
The average dividend growth is 13.12 % over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
Payout ratios are crucial in assessing the sustainability of dividend distributions. Aflac has an EPS-based payout ratio of 29.54% and a free cash flow-based payout ratio of 43.05%. These figures suggest that the company maintains a conservative payout policy, striking a balance between returning money to shareholders and retaining funds for future growth opportunities.
| Key figure | Ratio |
|---|---|
| EPS-based | 29.54 % |
| Free cash flow-based | 43.05 % |
Such conservative payout ratios suggest that Aflac not only has room to grow its dividends further but also ensures sufficient financial flexibility.
💵 Cashflow & Capital Efficiency
Cashflow and capital efficiency metrics indicate Aflac's operational effectiveness and its potential for sustainable dividend payments. They reflect how well the company can generate cash from its core activities to cover dividends and reinvest in growth.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Free Cash Flow Yield | 4.69% | 6.49% | 8.49% |
| Earnings Yield | 9.43% | 9.47% | 9.67% |
| CAPEX to Operating Cash Flow | 0% | 0% | 0% |
| Stock-based Compensation to Revenue | 0% | 0% | 0% |
| Free Cash Flow / Operating Cash Flow Ratio | 1 | 1 | 1 |
Aflac exhibits strong cash flow generating capabilities with favorable free cash flow and earnings yields, suggesting robust liquidity and profitability to support its dividend program.
📉 Balance Sheet & Leverage Analysis
A comprehensive balance sheet review provides insights into Aflac's financial health and leverage. The company's low debt levels and excellent coverage ratios indicate prudent financial management.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Debt-to-Equity | 28.73% | 33.50% | 36.95% |
| Debt-to-Assets | 6.38% | 5.81% | 5.65% |
| Debt-to-Capital | 22.32% | 25.09% | 26.98% |
| Net Debt to EBITDA | 0.20 | 0.58 | 0.72 |
| Current Ratio | N/A | N/A | 61.98 |
| Quick Ratio | N/A | N/A | 67.56 |
| Financial Leverage | 4.50 | 5.76 | 6.54 |
The balance sheet further certifies Aflac's long-term viability, with minimal solvency concerns due to inadequate debt levels and an excellent interest coverage ratio.
🧮 Fundamental Strength & Profitability
Fundamental strength and profitability ratios provide a focused snapshot of Aflac's operational effectiveness. They demonstrate the company's ability to generate profits in a sustainable manner.
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Return on Equity | 20.86% | 21.19% | 21.94% |
| Return on Assets | 4.63% | 3.68% | 3.35% |
| Margins: Net | 28.46% | 24.73% | 23.07% |
| EBIT | 33.55% | 27.93% | 25.42% |
| EBITDA | 33.55% | 27.93% | 25.42% |
| Gross | 100% | 100% | 100% |
| R&D to Revenue | 0% | 0% | 0% |
The table above highlights Aflac's consistent profitability growth, with healthy return on equity and stable net margins, supporting its dividend payments.
📈 Price Development
🏆 Dividend Scoring System
| Criteria | Rating | Score |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 5 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 5 | |
| Balance Sheet Quality | 4 |
Total Score: 36/40
📝 Rating
Aflac Incorporated demonstrates a strong dividend foundation with impressive growth prospects and financial integrity. The firm's historical dividend performance, growth trajectory, and conservative payout ratios make it a highly attractive proposition for income investors looking for stable and incremental income streams. Therefore, Aflac Inc. earns a "Highly Recommended" rating for dividend-focused portfolios.