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:
- 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.
- 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…
- The stock was down over 10% year to date after Friday’s endeavors. Obviously not typical of the S&P performance this year.
- Aflac is a true dividend aristocrat, see the list here. Paying an increased dividend every year for 25+ years!
- The 3 year dividend growth average is just north of 7%, with a dividend increase looming come October, excited for that!
- 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.
- 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