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Founded in 1955, Aflac Incorporated (AFL) stands out in the supplemental insurance world. Headquartered in Columbus, Georgia, Aflac provides a variety of insurance products in the U.S. through the American Family Life Assurance Company of Columbus (Aflac) and in Japan under Aflac Life Insurance Japan Ltd. (ALIJ). Its offerings include medical, income support, disability, accident, cancer coverage, and more. Celebrated for its excellence, Aflac was named one of Fortune’s Most Admired Companies for the 23rd time in February 2024. Aflac’s market cap currently stands at $50.6 billion.
Companies worth $10 billion or more are generally described as "large-cap stocks," and Aflac fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the insurance industry. The company has established a strong foothold in the industry through its offerings of various products and services.
Aflac is down just 1% from its 52-week high of $89.91, achieved on May 31. However, Shares of Aflac have gained 5.3% over the past three months, trailing behind the S&P 500 Index’s ($SPX) 6.6% returns during the same time frame.
In the longer term, AFL stock has lagged behind the broader market in 2024, posting a 7.9% YTD gain compared to SPX's 15% returns. Yet, over the past 52 weeks, it has outperformed the index with a 28.2% surge, surpassing SPX's 24.4% returns.
To confirm this mixed price performance, AFL has consistently traded over the 200-day moving average and above its 50-day moving average, with some fluctuations, since early May period.
Aflac has faced both headwinds and tailwinds in 2024. On the upside, the insurance company maintained robust financials, bolstered by its solid business model and consistent cash flow. Plus, as a Dividend Aristocrat, it boasts 41 consecutive years of dividend hikes.
However, in 2024, AFL stock experienced a sharp decline of roughly 10% following its Q4 earnings results, which missed expectations. Also, despite reporting better-than-expected Q1 earnings results, shares dipped 1.6% in the subsequent trading sessions. The insurer posted revenue of $5.4 billion, up 13.3% year over year, and adjusted EPS grew 7.1% to $1.66, exceeding forecasts. Yet, challenges in its Japanese segment, including a 6% decline in net earned premiums and tougher competition, have raised concerns among analysts and dampened investor sentiment.
Aflac’s rival Manulife Financial Corporation (MFC) outperforms AFL. Shares of Manulife are up 15.6% on a YTD basis and 34.5% over the past 52 weeks.
Analysts are taking a middle ground about AFL’s prospects. AFL stock has a consensus rating of “Hold” from the 15 analysts covering it, and the stock currently trades above the mean price target of $84.07.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
