AFLAC Incorporated (AFL) Is Even More Attractive After Earnings

Ranking

According to Portfolio123’s “All-Stars: Greenblatt” ranking system, AFL’s stock is ranked second among all S&P 500 stocks.

The “All-Stars: Greenblatt” ranking system is taking into account just two factors; Return on Capital and Earnings Yield (E/P) in equal proportions. Back-testing has proved that this ranking system is one of the best free available ranking method. I recommend investors to read Joel Greenblatt’s book “The Little Book That Beats the Market“, where he thoroughly explains his system.

Summary

AFLAC Incorporated (NYSE:AFL) delivered another strong quarter financial results which beat EPS expectations by $0.10 (6.1%), the company showed earnings per share surprise in its three last quarters. The average yen-dollar exchange rate thus far in the current quarter is 5.84% stronger than the average rate of the previous quarter.

As such, we can expect higher revenues and earnings in the current quarter. AFL’s valuation metrics are excellent, the forward P/E is very low at 9.9, and the EV/EBITDA ratio is also very low at 6.9. Aflac is generating strong free cash flows, and returns substantial capital to its shareholders by stock buybacks and by increasing dividend payments; Aflac has raised its annual dividend for 33 consecutive years. In addition, the company ranks in the top 40% of high quality dividend stocks using The 8 Rules of Dividend Investing.

All these factors bring me to the conclusion that AFL’s stock is a smart long-term investment.

Disclosure: This article is originally published on Sure Dividend by Arie Goren.