AFLAC Incorporated (AFL): Do Low Expectations Mean There Is Upside in This Stock?

This would be a delicate balance for management to strike, as the company would need to reduce pricing to generate more sales that would offset the difference in their margin. That being said, AFLAC Incorporated (NYSE:AFL) has readily acknowledged that the U. S. marketplace is a long-term project that won’t be won over just a few quarters. It’s possible that being slightly more price competitive could increase this division’s growth rate and thus benefit the company’s overall results.

A Value That Is Hard to Beat
While AFLAC Incorporated (NYSE:AFL)’s stock might not look like a tremendous value today, investors need to realize that this is a company that has been growing earnings and its dividend by double digits for many years. It’s very likely that AFLAC will continue increasing its dividend at a reasonable rate, and with a current yield of around 2.4%, investors are already collecting a decent payout.

By comparison, only Travelers Companies Inc (NYSE:TRV) has a similar yield at about 2.4%, and The Allstate Corporation (NYSE:ALL)’s yield at the present time is less than 2%. Since AIG pays no dividend, income focused investors would do well to stick with one of the first three names.

When you add up the combination of historically strong growth in the dividend, low expectations for growth in earnings, and the lowest P/E ratio of its peer group, AFLAC Incorporated (NYSE:AFL) looks like a value that is hard to beat. Long-term investors looking for both growth and income should add AFL to their Watchlist to see if this duck can swim against the current and give them something to quack about.

Chad Henage owns shares of Aflac. The Motley Fool recommends Aflac and American International Group. The Motley Fool owns shares of American International Group and has the following options: long January 2014 $25 calls on American International Group.

The article Do Low Expectations Mean There Is Upside in This Stock? originally appeared on Fool.com.

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