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Fundamental analysis: Aflac Incorporated (AFL)

Awarener score: 6.6

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (could not be estimated), the business stability (Excellent) and growth (Very poor), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

  • Business has been shrinking at a fast pace. It's been substantially worse when measured against peer companies.
  • Aflac Incorporated business trend stability is excellent. The higher the stability, the lower the risk. It looks somewhat better than rivals.

Margins score: 7.0

  • AFL profit margins -on goods and services sold- are usually meagre. They stand somewhat better than rival companies.
  • Business profit on sales tends to be meagre. It's substantially worse when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually very good. They remain a slight improvement compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still somewhat better than similar companies.
  • Profits -before income taxes- are usually excellent considering total sales, and remain encouraging in relation to rivals.
  • Total net profit tends to be excellent when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 4.8

  • Aflac Incorporated profit -on goods and services sold- has been growing at an extremely fast pace. It's been in a very weak position compared to competitors.
  • There is not sufficient data to estimate the operating income margin trend, which has been therefore unknown against comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a very low pace, which compares below average when measured against peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a very low tempo. It turns to be lacking compared to similar stocks.
  • In past years, profits -before income taxes- grew at a very low speed. It was somewhat worse than rivals.
  • In the previous years, growth on total net profit has been almost null, and almost average when measured against peer companies.
  • Earnings per share have grown at a very low rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 8.0

  • AFL managed to pay little to no income taxes on profits made in the past years. It's been somewhat better than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 7.8

  • Aflac Incorporated usually gets good returns on the resources it controls. It proves similar to peer firms.
  • The company normally gets excellent proceeds -on the resources directly invested in the business-. They remain in good shape compared to similar companies.
  • There's usually excellent profitability -in relation to owned resources-. It ranks great when measured against competitors.
  • In the past, got sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's similar to comparable enterprises.

Usage of Funds score: 3.6

  • AFL on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands similar to rival firms.
  • The company is usually not replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
  • In the past twelve months it paid some dividends, considering the current stock price. It came somewhat worse than competitors.
  • Has somewhat increased dividend payments in the past years. Business prospects may have improved. The company has behaved rather normal in relation to similar firms.
  • The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks worse than most comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands a slight improvement compared to rivals.
  • The company generates very few genuine funds. Investor rewards must be paid burning existing cash or by borrowing money, which isn't sustainable in the long run. Unless business prospects improve greatly, stockholder compensation could be at risk. It still looks substantially worse when measured against competitors.

Balance Sheet score: 8.7

  • Aflac Incorporated has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
  • Current ratio remains a mystery, as there was not sufficient Balance Sheet information. It turns to be unidentifiable against similar firms.
  • A very minor portion of resources controlled were provided for with financial debt. Financial strength is solid. Company could increase debt if it wished so, to reinvest in business, to buy a smaller company or to reward stockholders. It remains mediocre against rival firms.
  • Most resources controlled are already cash or short-term investments, which is best for liquidity. It looks below average when measured against rivals.
  • Quick ratio is unavailable at this moment, due to lacking data. It's a pity we cannot compare it with peer firms.
  • A conclusion on cash ratio could not be reached, as we lack inputs, which is unfortunate when trying to measure against similar enterprises.
  • Usually, sales are on less than a month credit. It still ranks encouraging in relation to peers.
  • Days of inventory outstanding are not known. It comes up as a big question mark against competitors.
  • We could not gauge the normal operating cycle of the company. It happens to be a mystery against peers.
  • Unfortunately, we had not enough data to estimate the days of payables outstanding. It ranks unknown against industry peers.
  • Cash conversion cycle remains unknown, due to not having enough inputs. It's incomparable against similar companies.
  • Net interest expenses consume a slight portion of usual business earnings, and are very easily bearable. It stands better than most rival firms.
  • Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks great when measured against comparable enterprises.
  • Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks lacking compared to similar firms.
  • Resource exploitation is low when yearly sales are considered, business volume must be significantly increased. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 7.6

  • Aflac Incorporated has an unknown adjusted Price-to-Earnings ratio, so we cannot comment on that. It happens to be a necessary comparison against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
  • There is insufficient information on the genuine funds generation capability showed in the past twelve months, which stands as an incognita in relation to similar companies.
  • Unfortunately, lack of enough yearly data impaired our ability to estimate the normal earnings power. It's still an unknown variable to measure against industry firms.
  • In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up rather normal in relation to peer ventures.
  • We are unsure on the relationship between net financial position and market capitalization of the stock. It looks we will not be able to reach a conclusion regarding similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be attractive. It ranks weak when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks a disappointment compared to rival firms.
  • The relation between the stock price and accounting book value might be reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains mediocre against peer firms.
  • We could not gauge an alternative metric of earnings power of the past twelve months. It happens to be an interesting metric to relate to industry peers.
  • An alternate metric on the usual genuine-funds generation ability could not be provided. It's still unknown against peer companies.

Total score: 6.6


AFL logos

Company at a glance: Aflac Incorporated (AFL)

Sector, industry: Financial Services, Insurance—Life

Market Cap: 36.52 billions

Revenues TTM: 21.16 billions

Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers cancer, medical, nursing care income support, GIFT, and whole and term life insurance products, as well as WAYS and child endowment plans under saving type insurance products in Japan. The Aflac U.S. segment provides cancer, accident, short-term disability, critical illness, hospital indemnity, dental, vision, long-term care and disability, and term and whole life insurance products in the United States. It sells its products through sales associates, brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies. The company was founded in 1955 and is based in Columbus, Georgia.

Awarener score: 6.6

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (could not be estimated), the business stability (Excellent) and growth (Very poor), and the company's inclination to return cash to the stockholders (Superb).