Aflac Incorporated (AFL), through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance. The company is a member of the dividend aristocrats’ index, has paid dividends since 1973 and increased them for 29 years in a row.
The company’s last dividend increase was in October 2011 when the Board of Directors approved a 10% increase to 33 cents/share. The company’s largest competitors include Nippon Life Insurance Company, Asahi Mutual Life Insurance Company and American fidelity Assurance Company.
Over the past decade this dividend growth stock has delivered an annualized total return of 5.20% to its shareholders.
dividend payment has increased by 20.40% per year over the past decade, which is higher than the growth in EPS. This was possible due to the expansion in dividend payout ratio. However, the rate of increase has slowed dramatically over the past five years.
dividend payment doubling almost every three and a half years. If we look at historical data, going as far back as 1984 we see that Aflac has actually managed to double its dividend every four and a half years on average. The dividend payout ratio has doubled from 15% in 2002 to 30% in 2011. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
is attractively valued at 8.40 times earnings, has an adequately covered dividend and yields 2.90%. I would consider adding to my position in the stock subject to availability of funds.
Full Disclosure: Long AFL
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