Investors who want to cash in on Aflac Incorporated’s (NYSE:AFL) upcoming dividend of $0.45 per share have only 3 days left to buy the shares before its ex-dividend date, 14 November 2017, in time for dividends payable on the 01 December 2017. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into AFL’s latest financial data to analyse its dividend attributes. See our latest analysis for AFL
5 questions I ask before picking a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has the amount of dividend per share grown over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How well does Aflac fit our criteria?
The current payout ratio for the stock is 24.80%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 26.74% and dividends yield to be around 2.16%. Moreover, EPS should decrease to $6.63. This means the company should be able to continue to payout dividends. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. AFL has increased its DPS from $0.82 to $1.8 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Compared to its peers, AFL generates a yield of 2.14%, which is high for insurance stocks but still below the low risk savings rate.
What this means for you:
Are you a shareholder? There’s not much to jump for joy about for Aflac from a dividend stock perspective. If this is news to you, I recommend you rethink about the stock as part of you current holdings. It may be valuable exploring other income stocks as alternatives to AFL or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? If you are building an income portfolio, then Aflac is probably not the best choice. On the other hand, if you are not strictly just a dividend investor, AFL could still be offering some interesting investment opportunities. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Dig deeper in our latest free fundmental analysis to explore other aspects of AFL.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.