Aflac, Inc. (NYSE:AFL)

CAPS Rating: 5 out of 5

A general business holding company and acts as a management company, overseeing the operations of its subsidiaries by providing management services and making capital available. The company's principal business is supplemental health and life insurance.


Player Avatar adamlevy (71.58) Submitted: 1/4/2013 1:16:53 PM : Outperform Start Price: $50.09 AFL Score: -21.25

As a leading life insurance provider in Japan, Aflac has a couple of great advantages over its peers that solely operate domestically. First, Japanese customers are extremely loyal. With 21 million life insurance policies in Japan, Aflac has the social proof necessary to attract new customers that will stay with them forever. Second, Japanese regulation keeps competition low and margins high.

Oh yeah, they also pay out a really nice dividend that ought to continue increasing (just as it's done for the last 29 years) because the payout ratio is less than 25%, the company is accumulating cash, and profits are growing equally as well.

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Member Avatar DrGoldin (99.71) Submitted: 1/15/2013 8:55:20 PM
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Speaking of Japan ... you're not worried about a weakening yen?

Member Avatar DonkeyJunk (22.13) Submitted: 1/18/2013 8:18:19 AM
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For my part, I'm not concerned about a weakening yen. Japan has been doing this dance for almost 20 years. In the coming years interest rates will rise, boosting AFL earnings still further, more than offsetting any weakness in the yen. Of course, if you're looking short term, then we're not having the same conversation.

Member Avatar DrGoldin (99.71) Submitted: 1/19/2013 1:08:13 AM
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Kinda depends on your definitions of "short term" and "long term." Yes, if you wait long enough, interest rates will rise in Japan. I'd just want to make sure it happens while I'm still alive.

Member Avatar DonkeyJunk (22.13) Submitted: 1/22/2013 3:44:00 PM
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Clarification: interest rates in the US (and elsewhere), where Aflac invests most of the money it makes from selling insurance.

Member Avatar DrGoldin (99.71) Submitted: 1/25/2013 2:53:01 AM
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Yeah, don't get me wrong, I think it's a solid company, and I've green-buttoned it myself (though I'm currently losing).

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