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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Aflac Incorporated (XNYS:AFL) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AFL
Name:
AFLAC INCORPORATED (XNYS:AFL)
Sector:
1.26B
Industry:
Insurance�Life
CEO:
Mr. Daniel Amos
Total Employees:
12,447
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF AFLAC INCORPORATED(AFL) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�LIFE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
59.4
One Month Price Target:
$59.7
Six Month Price Target :
$61.21
Likely Price in One Year's Time:
Ticker:
$63.01
Likely Trading Range Today Under (Normal Volatility)
$59.18
Price Upper limit ($) :
$59.68
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$56.42
This week:
$52.73
This month :
$46.06
Other Primary facts
Market Cap:
37.62B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
631.92M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
26.18%
-16.43%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$73.24
$66.89
$45.56
$51.91
Medium risk (<10%) entry points
Buy Call
Sell Call
$64.82
Buy Put:
Sell Put:
$63.46
$53.96
$55.34
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AFL
Sharpe Ratio:
1.53%
Comparison:
AFL, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is 18.45% higher than the industry
& is -32.81% lower than the market/S&P 500 average
Average Returns/Yield of
AFL
Daily returns:
0.05%
Weekly returns:
0.23%
Monthly returns:
0.93%
Yearly returns:
12.17%
Comparison of returns:
Average annual returns/yield (last 3 years) is -8.03% below industry average
Classification:
AFL, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
1
Statistical test of Returns:
AFL has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.47%
Weekly Volatility:
5.52%
Monthly Volatility:
11.04%
Yearly Volatility:
38.23%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.68%
Volatility in last five trading days has been -72.60% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.02%
Weekly VaR:
-11.23%
Monthly VaR:
-22.46%
How Much Can the price of
AFL
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-77.80%
This translates to price declining to:
$47.92
This translates to price declining to:
$13.19
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
AFL is a 58.51% riskier investment compared to the market/S&P 500 & is 35.79% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.40% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AFL
Beta in relation to market/S&P 500--0.90
Expected beta in 1 year's time:
0.873
Expected beta in 3 year's time:
1.234
Unlevered (debt free) Beta:
0.745
Beta in relation to Nasdaq (XNAS):
0.705
Beta in relation to all global stocks::
0.856
Beta Comparison & Analysis
Beta of competitors/peers::
1.071
Beta is -15.55% lower than peers
Average Industry Beta:
1.194
Beta is -24.23% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
10.28%
Sustainable growth rate is 21.40% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.018
Alpha is 119.05% above industry average alpha yield
Alpha is 118% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AFL
Equity cost of capital:
0.093
Equity cost of capital is -17.50% below industry mean WACC
Unlevered (without debt) cost of capital:
7.70%
Before-tax cost of debt:
2.99%
After-tax cost of debt:
2.36%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.36%
WACC is -19.80% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$33.68
Revenue growth rate per share of (3Y):
1.27
Annual revenue growth rate is -54.83% below industry average
EPS:
$6.09
Expected Annual growth rate of EPS (3Y):
12.82%
Expected future EPS growth rate is 216.35% higher than the Insurance�Life industry
Free cash flow (FCF) per share:
$7.49
Balance sheet equity growth per share: 16.26%
Equity growth rate per share is 113.78% higher than the industry
Debt per share
$12.29
EBITDA per share
$8.27
Valuation Analysis Today of
AFL
P/E Ratio:
8.96
P/E Ratio of Competitors/Peers:
8.15
P/E ratio is 9.96% higher than main peers & is -7.76% lower than the industry
Stock price/value with industry average P/E ratio: $59.16
AFL is 0.40% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $51.67
Present value of the expected future dividends only: $30.05
P/S (Price to Sales ratio):
1.76
Price to sales ratio is 64.06% above the industry mean
P/B (Price to book value ratio):
1.27
Price to free cash flow: 7.93
Price to free cash flow ratio is -26.88% lower than the industry
Net income growth rate (3Y):
59.71%
Net income growth rate is 161.69% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 6.15%
Dividend yeild: 2.46%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.46
Expected next dividend best case: $0.44
Expected next dividend worst case: $0.36
Average dividend payment (long-term): $0.32
Average dividend increase/decrease (growth rate) % per period: 4.28%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 16/08/2022
Expected next dividend declaration date: 26/07/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 18/05/2022
Previous dividend declaration date: 27/04/2022
Dividend History:
2022-05-17--$0.40
2021-11-16--$0.33
2021-05-18--$0.33
2022-02-15--$0.40
2021-08-17--$0.33
2021-02-16--$0.33
Dividend growth rate is 29.80% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
26.31%
Net debt to equity ratio:
11.83%
Debt to assets ratio:
5.28%
Net debt to assets ratio:
2.38%
Debt-to-asset ratio is -93.97% below industry average
Ability to repay debt:
Interest coverage ratio:
22.53
Interest coverage ratio is 439.04% more than industry average
Looking forward:
Debt growth rate:
0.72%
Annual debt growth is -105% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.689
Statistical significance of correlation:
AFL has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.695
Stock price is -0.84% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.695
Correlation of price movement with Nasdaq (^IXIC):
0.046
Covariance of price movement with the market:
0.066
Kurtosis
27.509
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.925
Returns are right (positive) skewed; mean returns are greater than median and mode returns
Fundamental Analysis & Dupont Analysis of
AFL
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
12.34%
Operating profit margin is -439.09% lower than the industry
Net Profit Margin Ratio:
100%
Effective Tax Rate:
18.62%
Effective tax rate is -8.33% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
13.76%
Return on equity (ROE) is 337.31% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
2.76%
Return on assets (ROA) is 229.08% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.7M
Each employee generates -10% less revenue than industry average revenue per employee
EBITDA generated per employee:
419.9K
Each employee generates 31% more EBITDA than industry average revenue per employee
Profit generated per employee:
326.5K
Each employee generates 41% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
101.2K
Each employee generates 90% more free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates 90% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
AFL
The Travelers Companies, Inc. (XNYS:TRV)
APOLLO GLOBAL MANAGEMENT, INC. (XNYS:APO)
Banco Santander Brasil SA (XNYS:BSBR)
Banco Bilbao Vizcaya Argentaria SA (XNYS:BBVA)
MANULIFE FINANCIAL CORP (XNYS:MFC)
Nu Holdings Ltd (XNYS:NU)
Itau Unibanco Holding SA (XNYS:ITUB)
PRU
NATWEST GROUP PLC (XNYS:NWG)
Current Analyst Ratings
Strong buy�4%
Buy�8%
Hold�42%
Sell�4%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
21.28B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
5.19B
-
-
-
-
1.52B
1.52B
-
232.00M
-
5.23B
-
4.06B
4.99B
930.00M
4.06B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
489.00M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 261000.00K
Net Cash Provided by Operating Activities:
1.26B
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 1517000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
4.28B
89.97B
94.24B
730.00M
-
-
-
538.00M
-
-
112.05B
-
-
-
147.05B
147.05B
-
-
3.50B
-
-
-
7.77B
-
7.77B
125.29B
117.52B
135.00M
42.41B
3.1B
-
March 31, 2022 at 6:00:00 AM
16.29B
29.53B
147.05B
202.02B
7.77B
3.5B
647.00M
- 340000.00K
- 1210000.00K
-
9.00M
- 500000.00K
- 250000.00K
4.00M
- 737000.00K
- 89000.00K
- 776000.00K
4.28B
5.05B
1.26B
-
1.26B
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
AFL
2023
2024
2025
2026
2027
$68.77
$72.95
$77.39
$82.09
$87.08