Latest Stock Purchase 8/1/14- Aflac

Quack, Quack, Quack, Quack, AFLAC!  I think everyone can get the gist of what this article is going to be about.  I had my latest stock purchase last Friday on the 1st of August, as a nice little downturn to the market showed a more appealing side to my favorite insurance company – Aflac (AFL). Why did I buy them now?  I had my post about 4 stocks that I want to “Re-Up” my position on last week.  This is where I am looking to infuse capital into stocks that I already know at prices that are attractive in the market right now.  Here are the main reasons why I added to my currently holding:

  1. The yield was at 2.50%, which is very close to their 5 year dividend yield average.  I discussed at my post why I analyze the 5 year dividend yield metric because it shows another way to see if there is some value to be had.
  2. Aflac crushed earnings, beating estimates by 7 cents per share, even though performance vs prior year has declined, this was paired with the weaker exchange rate of the Japanese Yen.  Actually, it’s also stated, “Excluding the impact from the weaker yen, operating earnings per diluted share increased 4.3%.”  They also hold $115M in cash…
  3. The stock was down over 10% year to date after Friday’s endeavors.  Obviously not typical of the S&P performance this year.
  4. Aflac is a true dividend aristocrat, see the list here.  Paying an increased dividend every year for 25+ years!
  5. The 3 year dividend growth average is just north of 7%, with a dividend increase looming come October, excited for that!
  6. The P/E was approximately 9.50 when I purchased it.  Industry average per morning star is 15.3 and this is definitely lower than Chubb (CB) and Cincinnati Financial (CINF) of 10.4 and 18 respectively.
  7. The payout ratio for Aflac is approximately around 23-25% aka they can keep those dividend increases coming for a long, long time.

With all of these positives being said, I purchased 25 more shares at a cost of $1,494.20 and this added $37 to my dividend income for the year, bringing my total to $3,775 projected forward dividend income.  My total position went from roughly 50 shares to 75 and I couldn’t be more excited that I now have roughly $112 coming in every year going forward with this stock, which with an estimated 7% dividend increase ~ that raises this total to $120, ah the beauty of dividend stocks!

I hope the fun doesn’t stop here.  As you know, my post was about 4 stocks I want to add to my position and this is only 1.  PFE, MCD and PG — this diplomat is coming for you, so you better keep that price down or continue to hide lower for cover, sound good?  THANKS.  Anyways — how many in the community also bought Aflac within the last week?  I know I read a few spots seeing some purchases here and there – such as My Dividend Pipeline.  Thanks everyone for stopping by, keep researching, stay hungry, save often and invest wisely.  Talk soon!

-Lanny

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23 thoughts on “Latest Stock Purchase 8/1/14- Aflac

  1. Hey Lenny,

    Thanks for your post. I’m looking into AFL and your post helps me a lot.
    It looks lije a great stock. I will perform my Pollie-Code analysis soon.
    Keep up the good work.
    Cheers,
    Pollie

  2. Lanny,

    Nice buy. I see Ryan @ MDG also recently bought AFL. Love the purchase.

    It’s one of my bigger positions so I’m not particularly interested in buying more right now. But if I didn’t already have a large position in the company then I’d definitely look into buying shares here.

    Quack, quack! 🙂

    Best wishes.

    • DM,

      Definitely understand if its a large position already. For me it was roughly 4ish% of my individual stock/taxable account and thought I’d like it somewhere near 7.5%, as that also leaves me a little room to increase it to 10 on another dip. I am eager to October, as that is their traditional dividend increase with an expectation of around the 7% area, as I think they’ll keep the payout ratio low.

      Oh Bert has been making that sound all day at work. Quack, Quack, gotta love it! Thanks again DM

      -Lanny

    • AG,

      Exactly. Depending on what position you want in them, if it’s not at a level where you want it (weighting in your portfolio wise) – then investors hopefully are jumping on this. As I commented with Mantra earlier, I left a little wiggle room in case it slides 3-5% more. Thanks for the stop AG, long live the duck.

      -Lanny

    • FFdividend,

      Thanks for rolling by, much appreciated. I thought at this level of AFL, down this much YTD, upcoming dividend increase and close to the historical 5 year yield average, it had to be done. Still at great levels actually, hoping it slides a bit more too..

      V is a nice grab as well, if I didn’t purchase a small piece back in 2010 – I would re-analyze and see where they stand. I know Mantra picked some up a few weeks ago. Huge company and will continue to grow with electronic forms of payment becomes spread across the globe.

      Thanks again, talk soon FFD!

      -Lanny

    • David,

      Thank you – truly appreciated! I know there are others out there scoping up the duck with white feathers. The valuation was just right and thought – okay – why wouldn’t I buy it now? Aka it was hard not to pull the trigger. Only downside is the market as a whole may continue the decline, which isn’t a bad thing – just allows more opportunity to scoop up some more! Thanks again David, talk soon.

      -Lanny

  3. Hi Lanny,
    Congrats on your purchase! Certainly looks like a great value at the moment.
    AFL’s on my watch list but I won’t be back around to Financials for a few more weeks, so we’ll see how it looks next month.
    Best wishes,
    -DL

  4. Nice purchase. AFL looks very interesting, especially with such low PE number. I’d totally invest in AFL if I’m not already heavy in insurance & finance sectors.

  5. I love AFL. I’m sad I had to sell!

    What do you use to get your stock info? I found other info that doesn’t show the dividend yield that high.

    Thanks,
    Wallet Engineer #1

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