Aflac Incorporated Hikes Quarterly Dividend 15% (AFL)
By: Ned Piplovic,
Aflac Incorporated (NYSE:AFL) continued its long track record of annual dividend hikes with a 15.6% payout boost for the first quarter of 2018 and currently offers a 2.4% forward yield, as well a one-year asset appreciation of nearly 30%.
The company is just one of the 52 companies that carry the Dividend Aristocrat designation. Only S&P 500 companies with a market capitalization of at least $3 billion that boosted their annual dividends for more than 25 consecutive years receive the Dividend Aristocrat designation. Since Aflac’s current streak of consecutive dividend hikes extends 35 years, the company has been a Dividend Aristocrat for a decade.
Aflac’s will distribute its next quarterly dividend on the March 1, 2018, pay date to all the company’s shareholders of record before the next ex-dividend date, which occurs February 20, 2018, just nine days before the pay date.
Aflac Incorporated (NYSE:AFL)
Headquartered in Columbus, Georgia and founded in 1955, Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products to approximately 50 million people worldwide. The company operates through two business segments — Aflac U.S. and Aflac Japan. The Aflac U.S. segment provides products designed to protect individuals from depletion of assets comprising accident, cancer, critical illness/care, hospital indemnity, fixed-benefit dental and vision care plans. The company offers loss-of-income products, such as life and short-term disability plans, in the United States. Additionally, the Aflac Japan segment offers various voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans and annuities in Japan.
The company’s $0.52 dividend payout for the first quarter of 2018 is 15.6% higher than the $0.45 quarterly distribution for the fourth quarter of 2017. This new quarterly payout amount is equivalent to a $2.08 annualized payout and a 2.4% yield. While the company’s current yield trails behind the average yield of the entire Financials sector, Aflac’s current 2.4% yield is 55% above the 1.51% average yield of all the companies in the Accident & Health Insurance segment. Excluding the companies that do not pay dividends raises the average yield of the segment from 1.51% to 1.83%. However, Aflac’s current yield is still 28% above the 1.83% average yield of all dividend-paying companies in the Accident & Health Insurance segment.
The company started paying dividends in 1973 and has been raising its annual payout since1983. Just over the past two decades, the company boosted its annual dividend distribution at an average growth rate of 15% per year. The company has enhanced its annual dividend amount more than 16-fold since 1998. With its current dividend payout ratio at a very low 24%, the company can easily continue to support its current level of dividend growth.
The company’s share price rose at a steady pace and with minimal volatility for most of the trailing 12 months. The share price started its current 12-month period from its 52-week low of $68.67 on February 7, 2017, then rose 33.5% and reached its new all-time high of $91.69 by January 11, 2018. After peaking in January 2018, the share price experienced a little more volatility and dropped a few points to close on February 5, 2018, at $86.19. That closing price was just 3% below the 52-week high, 29% higher than it was at the beginning of the 12-month trailing period and 80% above its price from five years earlier.
The company shared positive results at its earnings conference call on February 1, 2018. The company announced $1.60 earnings per share (EPS) for the fourth quarter 2017. The company’s EPS results exceeded Wall Street’s expectations in every quarter of 2017 and topped the Zacks Consensus Estimate for the fourth quarter of 2017 by 3.2%.
The combination of rising dividend and asset appreciation of almost 30% rewarded Aflac’s shareholders with a 35.5% total return over the past 12 months. Over the past three and five years, the total return was 62% and 83.5%, respectively.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.