20 Worst Dividend Aristocrat Stocks According to Analysts

3. Aflac Incorporated (NYSE:AFL)

Average Analyst Rating Score: 4

Aflac Incorporated (NYSE:AFL) is a Georgia-based insurance company that provides supplemental insurance services to its consumers. In the first quarter of 2024, the company reported revenue of $5.4 billion, up 13.2% from the same period last year. Its net earnings for the period came in at $1.9 billion, growing from $1.2 billion in the prior-year period. Although the company’s business is showing strong signs, analysts have raised concerns about its operations in Japan.

Aflac Incorporated (NYSE:AFL) does the majority of its business in Japan, and the complex macroeconomic environment has heightened the importance of interest rate-related risks. According to the company’s 10K report, Aflac Japan’s Solvency Margin Ratio (SMR) is highly sensitive to interest rate changes, which may require adopting a more cautious strategy. Its net earned premiums in Japan for the first quarter were $1.8 billion, down 16.3% from the same period last year. This drop was mainly due to reinsurance transactions from the prior year and limited pay policies reaching paid-up status. Its total adjusted revenues in the country also declined by 11.4% to $2.5 billion. Last month, Truist Financial maintained a Hold rating on the stock with an $82 price target. Overall, analysts have a consensus Sell rating on AFL with an $86.2 price target, which reflects a downside potential of 1%. Aflac Incorporated (NYSE:AFL) is among the worst dividend aristocrats on our list.

Aflac Incorporated (NYSE:AFL) currently offers a quarterly dividend of $0.50 per share and has a dividend yield of 2.30%, as of June 14. The company holds a 42-year track record of consistent dividend growth.

With a collective stake value of over $302.8 million, 24 hedge funds owned positions in Aflac Incorporated (NYSE:AFL) in Q1 2024, down from 28 in the previous quarter, according to Insider Monkey’s database. Among these hedge funds, Ariel Investments was the company’s leading stakeholder in Q1.