In This Article:
Exploring the Sustainability and Growth of Aflac Inc's Dividends
Introduction to Aflac Inc's Dividend Announcement
Aflac Inc (NYSE:AFL) recently announced a dividend of $0.5 per share, payable on 2024-06-03, with the ex-dividend date set for 2024-05-21. 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?
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Aflac Inc offers supplemental health insurance and life insurance in the United States and Japan. In addition to its cancer policies, the company has broadened its product offerings to include accident, dental and vision, disability, and long-term-care insurance. It markets its products through independent distributors, selling the majority of its policies directly to consumers at their places of work and also reaches out to its customers out of their worksite through digital mediums. The company has two reportable business segments; Aflac Japan, which generates the majority of the revenue, and Aflac U.S.
A Glimpse at Aflac Inc's Dividend History
Aflac Inc has maintained a consistent dividend payment record since 1983, distributing dividends on a quarterly basis. Aflac Inc has also increased its dividend each year since 1983, earning it the status of a dividend aristocrata title awarded to companies that have increased their dividend each year for at least the past 41 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 1.99% and a 12-month forward dividend yield of 2.26%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Aflac Inc's annual dividend growth rate was 14.50%, which decreased to 11.30% per year over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at 9.20%. 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 3.40%.
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 2024-03-31, Aflac Inc's dividend payout ratio is 0.27. 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 2024-03-31, suggesting fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.