Investors looking for yield don't have it easy these days. With interest rates not far from all-time lows, bonds and certificates of deposit (CDs) don't provide the income they used to. The S&P 500 index is at all-time highs, pushing its dividend yield to the lowest since at least the dot-com bubble two decades ago.

That combination makes Aflac's (NYSE:AFL) payout even more impressive. The provider of supplemental life and health insurance -- coverage for expenses not paid by regular insurance -- is a slow grower. But its consistent distribution, steady top line, and attractive valuation might make it perfect for those who want a healthy yield but are afraid of stock-price declines.

A middle-aged couple reviewing documents with an insurance broker.

Image source: Getty Images.

A dependable payout

Aflac has reliably distributed cash to shareholders through wars, manias, financial crises, and a pandemic. The company has raised its dividend for 38 consecutive years. The increases have varied year to year, but its latest was an 18% jump. The increases have averaged 8% per year over the past decade.

Aflac has done this while also buying back shares. In addition to the company's impressive 2.5% dividend, management has returned an extra 3% per year since 2013 in the form of share repurchases. Dividends keep rising, and the number of outstanding shares keeps shrinking. It's a one-two punch that conservative investors should love.

AFL Dividends Paid (TTM) Chart

AFL Dividends Paid (TTM) data by YCharts.

Despite consistently raising the payout, the company still has plenty of cash left over. Its payout ratio -- the percentage of net income distributed as dividends -- was only 15% for the past 12 months. That measure hasn't been above 27% in a decade. It means the board of directors will have no trouble continuing to increase dividends in the future.

A cheap option in an expensive market

The company isn't exciting, and one way that can show up is a low valuation. Here, Aflac fits the bill. Because of the slow growth, life insurers typically trade at low multiples of earnings. But Aflac is cheap, even for this group.

The median price-to-earnings (P/E) ratio of the seven largest U.S. life insurers is currently about 14. Aflac, which has historically had a P/E ratio of between 7 and 13, trades for 6.8 times earnings.

AFL PE Ratio Chart

AFL PE Ratio data by YCharts.

The stock might have a low valuation because of the pandemic. When people don't seek treatment, costs go down. The benefit ratio -- the cost of providing care as a percent of premiums collected -- was 39.1% in the first quarter of 2021. That's a full 9 percentage points below what it was in the first quarter of 2020.

Management has said that temporarily inflates profit margins and expects the number to normalize in the back half of this year. That said, the stock still trades at a reasonable 10 times the average of the past five years' earnings. Even compared to normal times, the stock isn't expensive.

Set it and forget it

Aflac's ability to raise the dividend each year, its commitment to doing so, and the stock's cheap valuation might make it the best stock for long-term investors. Despite slow growth in an industry that lacks excitement, Aflac should provide an attractive payout and let investors ignore the short-term market gyrations.

If you're looking for a low-drama stock that provides dependable income, Aflac may be the perfect addition to your portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.