Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Aflac 1, Major Medical 0

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

If a duck quacks in the forest and no investor is around to hear it, does it make a noise? The answer appears to be a resounding yes!

In its ongoing battle against major medical, supplemental insurance giant Aflac (NYSE: AFL  ) once again looks like it's delivered another knockout earnings report.

Aflac derives three-quarters of its revenue from Japan, so as you can imagine, following the tragic earthquakes in Japan in March, the company's bottom line suffered. As Japan's people recover from the disaster, so has Aflac -- and in a big way.

First, prospects in Europe are improving, which is an immediate boost to Aflac since it has a chunk of its investment portfolio tied to European debt. Today's negotiated debt deal, while not a white knight to the European debt debacle, is a step in the right direction to stabilizing the region's financial system. During the first half of 2011, Aflac was forced to realize $1 billion in losses tied to its European investments. With Europe's outlook beginning to brighten, Aflac's investment portfolio should receive a nice boost.

Even though Aflac's quarterly report was skewed by favorable currency translations from the yen into U.S dollars, the underlying figures behind its growth are unmistakably bullish. For such a large insurance company, a 22% jump in annualized premium sales in Japan can only be described as remarkable. Even its U.S sales have been strong with investment income jumping by 8.5% during the quarter.

But let's not beat around the bush here. The real reason investors should be jumping at the chance to own Aflac is because it puts shareholders first. Aflac announced its 29th consecutive annual dividend increase to $0.33 per share, payable to shareholders in the fourth quarter. This places Aflac, even after yesterday's near-10% pop, at a very tempting 2.8% yield.

Perhaps more impressive, Aflac continues to reinvest in its business and its shareholders' future. Aflac anticipates spending $300 million on share repurchases in 2011 and expects this number to double in 2012 to $600 million -- but wait, I'm not done. The company also projects this figure could yet again double to more than $1 billion in share buybacks in 2013. Twenty-nine years of increasing dividends and increasing share buybacks -- now that's confidence in your business.

The crazy thing is that even after yesterday's meteoric move higher, Aflac is still cheaply valued at just over 7 times forward earnings. It boasts better operating margins than rivals MetLife (NYSE: MET  ) , and Sun Life Financial (NYSE: SLF  ) , while offering a higher dividend yield than both Prudential Financial (NYSE: PRU  ) and Primerica (NYSE: PRI  ) .

My advice is that if this duck quacks, you listen!

What do you think the future holds for Aflac? Share your thoughts in the comments section below, and consider adding this dividend aristocrat to your free and personalized watchlist to keep up on the latest news with the supplemental insurance giant.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. He likes cash, which, he has been told, is just as good as money. You can follow him on CAPS under the screen name TMFUltraLong and on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of Aflac. Motley Fool newsletter services have recommended buying shares of Aflac. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that pays its shareholders in transparency. 

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1579578, ~/Articles/ArticleHandler.aspx, 10/22/2016 6:02:23 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 20 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:02 PM
AFL $69.38 Down -0.38 -0.54%
Aflac CAPS Rating: *****
MET $46.38 Down -0.31 -0.66%
MetLife CAPS Rating: *****
PRI $55.15 Down -0.05 -0.09%
Primerica CAPS Rating: **
PRU $83.15 Down -0.77 -0.92%
Prudential Financi… CAPS Rating: ****
SLF $33.18 Down -0.06 -0.18%
Sun Life Financial CAPS Rating: *****