Aflac Incorporated’s AFL board of directors recently announced a 16% increase in its first-quarter 2025 dividend, reflecting its commitment to enhancing shareholder value. The new dividend is 58 cents per share, up from the fourth-quarter 2024 dividend of 50 cents.
This marks the 42nd consecutive year of dividend increase for the company. The increased dividend will be paid on March 3, 2025, to shareholders of record as of Feb. 19. Before this latest hike, Aflac had raised its quarterly dividend by 19% in November 2023.
Aflac has consistently paid dividends, underscoring its reliability as a dividend-paying company. Based on the stock’s Dec. 2 closing price of $111.40, the new dividend will yield 1.8% to AFL. The company distributed $820 million in dividends in the first nine months of 2024.
Aflac’s Active Pursuit of Share Buybacks
In addition to its steady dividend growth, Aflac actively engages in share buybacks. During the first nine months of 2024, the company repurchased 23.4 million shares worth $2.1 billion, with 54.3 million shares left for repurchase as of Sept. 30, 2024.
These consistent dividend increases and share buybacks highlight Aflac’s strong liquidity position. With a robust cash balance and adequate cash generation abilities, AFL demonstrates financial strength. As of Sept. 30, 2024, the company’s cash and cash equivalents were $5.6 billion, which climbed 30.3% from the 2023-end figure. It generated net cash from operations of $2.4 billion in the first nine months of 2024.
Aflac’s strong cash position enables it to invest in growth initiatives, thereby supporting its long-term expansion plans. Its sound solvency position reduces balance sheet risks and allows continued capital deployment. These strategic moves make Aflac an appealing option for investors seeking steady yields and long-term growth potential.
Aflac’s return on equity, a profitability measure that is used to identify a company’s ability to utilize its shareholders’ fund, is 16.4% as of Sept. 30, 2024. The figure remains higher than the industry’s average of 16.2%.
AFL’s Price Performance & Zacks Rank
Shares of Aflac have gained 34.6% in the past year compared with the industry’s 43.3% growth. AFL currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks in the insurance space are ProAssurance Corporation PRA, Primerica, Inc. PRI and CNO Financial Group, Inc. CNO. While ProAssurance sports a Zacks Rank #1 (Strong Buy), Primerica and CNO Financial carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
ProAsssurance’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average surprise being 61.46%. The Zacks Consensus Estimate for PRA’s 2024 earnings is pegged at 80 cents per share. A loss of 14 cents per share was incurred in the prior year.
The consensus mark for PRA’s earnings has moved 5.3% north in the past seven days. Shares of ProAssurance have gained 26.5% in the past year.
Primerica’s earnings surpassed estimates in two of the last four quarters and missed the mark twice, the average surprise being 4.89%. The Zacks Consensus Estimate for PRI’s 2024 earnings indicates a 20.2% rise, while the estimate for revenues implies an improvement of 6.9% from the respective prior-year figures.
The consensus mark for PRI’s earnings has moved 1% north in the past seven days. Shares of Primerica have gained 40.7% in the past year.
CNO Financial’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 24.51%. The Zacks Consensus Estimate for CNO’s 2024 earnings indicates a 20.7% rise from the prior-year figure.
The consensus mark for CNO’s earnings has moved up 5.7% in the past 30 days. Shares of CNO Financial have gained 46.3% in the past year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
