Warren Buffett attracts a lot of attention. As the world's third-richest person and most celebrated investor, thousands try to glean what they can from his thinking processes and track his investments.

While we can't know for sure whether Buffett is about to buy Aflac (NYSE: AFL) -- he hasn't specifically mentioned anything about it to me -- we can discover whether it's the sort of stock that might interest him. Answering that question could also inform whether it's a stock that should interest us.

In his most recent 10-K, Buffett lays out the qualities he looks for in an investment. In addition to adequate size, proven management, and a reasonable valuation, he demands:

  1. Consistent earnings power.
  2. Good returns on equity with limited or no debt.
  3. Management in place.
  4. Simple, non-techno mumbo jumbo businesses.

Does Aflac meet Buffett's standards?

1. Earnings power
Buffett is famous for betting on a sure thing. For that reason, he likes to see companies with demonstrated earnings stability.

Let's examine Aflac's earnings history:

Buffettafl

Source: Capital IQ, a division of Standard & Poor's. Free cash flow is adjusted based on author's calculations.

Over the past five years, Aflac has generated fairly consistent earnings.

2. Return on equity and debt
Return on equity is a great metric for measuring both management's effectiveness and the strength of a company's competitive advantage or disadvantage -- a classic Buffett consideration. When considering return on equity, it's important to make sure a company doesn't have an enormous debt burden, because that will skew your calculations and make the company look much more efficient than it actually is.

Since competitive strength is a comparison between peers, and various industries have different levels of profitability and require different levels of debt, it helps to use an industry context.

Company

Debt-to-Equity

Return on Equity (LTM)

Return on Equity
(5-Year Average)

Aflac 30% 21% 20%
MetLife (NYSE: MET) 133% 7% 6%
Prudential Financial (NYSE: PRU) 104% 10% 10%
Principal Financial (NYSE: PFG) 24% 8% 11%

Source: Capital IQ, a division of Standard & Poor's.

Aflac produces a fairly high return on equity while employing modest debt.

3. Management
CEO Daniel Amos has been at the job since 1990.

4. Business
The insurance industry isn't particularly susceptible to technological disruption.

The Foolish conclusion
Regardless of whether Buffett would ever buy Aflac, we've learned that the company exhibits many of the characteristics of a quintessential Buffett investment: consistent earnings, high returns on equity with limited debt, tenured management, and a straightforward business.

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Ilan Moscovitz doesn't own shares of any companies mentioned. You can follow him on Twitter@TMFDada. 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 may not 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.