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Aflac Gains 48% in the Past Year: What Lies Ahead for Investors?
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Shares of Aflac Incorporated (AFL - Free Report) have gained 47.5% in the past year compared with the industry’s 41.8% growth. The Finance sector and the S&P 500 composite index rose 31.4% and 32.4%, respectively, in the same time frame. With a market capitalization of $64.6 billion, the average volume of shares traded in the last three months was 2.3 million.
Aflac benefits from strong U.S. sales, strategic growth initiatives, product enhancements, digital transformation and a solid financial position supporting capital deployment.
The leading supplemental health insurance provider, presently carrying a Zacks Rank #2 (Buy), beat earnings estimates in three of the trailing four quarters and missed the mark once, the average surprise being 8.24%.
Return on equity in the trailing 12 months is currently 16.2%, which is higher than the industry’s average of 16.1%. This substantiates the company’s efficiency in utilizing shareholders’ funds.
Image Source: Zacks Investment Research
Can AFL Retain the Momentum?
The Zacks Consensus Estimate for Aflac’s 2024 earnings is pegged at $6.76 per share, indicating a 8.5% increase from the year-ago figure. The consensus mark for 2025 earnings is pegged at $7.09 per share, indicating a 4.9% increase from the 2024 estimate.
Aflac’s revenue growth is supported by strong U.S. sales, driven by strategic growth initiatives, high persistency rates and improved productivity. The company designs and markets supplemental insurance products across its U.S. and Japan segments. Net earned premiums in the U.S. unit rose 2.7% year over year in the first half of 2024. Growing sales of AFL’s products are expected to boost premium revenues, which are a major driver of overall revenues for insurers.
Aflac introduces new products and enhances existing offerings to meet evolving customer needs. Partnerships with SKYGEN and Empathy this year bear testament to its efforts to enhance capabilities.
Aflac also integrates digital solutions into its operations to stay aligned with the ongoing digitization trend. The company's substantial investments in digital transformation have enhanced operational efficiency and enabled a transition to digital sales channels, which is likely to continue to support healthy profit margins going forward.
Aflac's strong financial position, highlighted by a solid cash balance and adequate cash flow, is a key advantage. As of June 30, 2024, cash and cash equivalents increased 40.7% from the 2023-end level. It generated $1.1 billion in operating cash flows in the first half of 2024. This financial strength allows the company to fund growth initiatives and strategically deploy capital through share buybacks and dividend payments. Its leverage ratio of 22.2% at the second-quarter end was below the industry average of 22.5%.
Palomar’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for PLMR’s 2024 earnings indicates a 30.9% rise while the estimate for revenues implies an improvement of 41.6% from the respective prior-year figures.
The consensus mark for PLMR’s earnings has moved 4.1% north in the past 60 days. Shares of Palomar have gained 91.3% in the past year.
Assurant’s earnings surpassed estimates in each of the last four quarters, the average surprise being 33.56%. The Zacks Consensus Estimate for AIZ’s 2024 earnings indicates a 6.8% rise while the estimate for revenues implies an improvement of 4.9% from the respective prior-year figures.
The consensus mark for AIZ’s 2024 earnings has moved 3.3% north in the past 60 days. Shares of Assurant have gained 29.9% in the past year.
Kemper’s earnings outpaced estimates in two of the trailing four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 6.93%. The Zacks Consensus Estimate for KMPR’s 2024 earnings is pegged at $5.17 per share. A loss of 74 cents per share was incurred in the prior year.
The consensus mark for KMPR’s 2024 earnings has moved up 7.9% in the past 60 days. Shares of Kemper have gained 41.3% in the past year.
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Aflac Gains 48% in the Past Year: What Lies Ahead for Investors?
Shares of Aflac Incorporated (AFL - Free Report) have gained 47.5% in the past year compared with the industry’s 41.8% growth. The Finance sector and the S&P 500 composite index rose 31.4% and 32.4%, respectively, in the same time frame. With a market capitalization of $64.6 billion, the average volume of shares traded in the last three months was 2.3 million.
Aflac benefits from strong U.S. sales, strategic growth initiatives, product enhancements, digital transformation and a solid financial position supporting capital deployment.
The leading supplemental health insurance provider, presently carrying a Zacks Rank #2 (Buy), beat earnings estimates in three of the trailing four quarters and missed the mark once, the average surprise being 8.24%.
Return on equity in the trailing 12 months is currently 16.2%, which is higher than the industry’s average of 16.1%. This substantiates the company’s efficiency in utilizing shareholders’ funds.
Image Source: Zacks Investment Research
Can AFL Retain the Momentum?
The Zacks Consensus Estimate for Aflac’s 2024 earnings is pegged at $6.76 per share, indicating a 8.5% increase from the year-ago figure. The consensus mark for 2025 earnings is pegged at $7.09 per share, indicating a 4.9% increase from the 2024 estimate.
Aflac’s revenue growth is supported by strong U.S. sales, driven by strategic growth initiatives, high persistency rates and improved productivity. The company designs and markets supplemental insurance products across its U.S. and Japan segments. Net earned premiums in the U.S. unit rose 2.7% year over year in the first half of 2024. Growing sales of AFL’s products are expected to boost premium revenues, which are a major driver of overall revenues for insurers.
Aflac introduces new products and enhances existing offerings to meet evolving customer needs. Partnerships with SKYGEN and Empathy this year bear testament to its efforts to enhance capabilities.
Aflac also integrates digital solutions into its operations to stay aligned with the ongoing digitization trend. The company's substantial investments in digital transformation have enhanced operational efficiency and enabled a transition to digital sales channels, which is likely to continue to support healthy profit margins going forward.
Aflac's strong financial position, highlighted by a solid cash balance and adequate cash flow, is a key advantage. As of June 30, 2024, cash and cash equivalents increased 40.7% from the 2023-end level. It generated $1.1 billion in operating cash flows in the first half of 2024. This financial strength allows the company to fund growth initiatives and strategically deploy capital through share buybacks and dividend payments. Its leverage ratio of 22.2% at the second-quarter end was below the industry average of 22.5%.
Other Stocks to Consider
Other top-ranked stocks in the insurance space are Palomar Holdings, Inc. (PLMR - Free Report) , Assurant, Inc. (AIZ - Free Report) and Kemper Corporation (KMPR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Palomar’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for PLMR’s 2024 earnings indicates a 30.9% rise while the estimate for revenues implies an improvement of 41.6% from the respective prior-year figures.
The consensus mark for PLMR’s earnings has moved 4.1% north in the past 60 days. Shares of Palomar have gained 91.3% in the past year.
Assurant’s earnings surpassed estimates in each of the last four quarters, the average surprise being 33.56%. The Zacks Consensus Estimate for AIZ’s 2024 earnings indicates a 6.8% rise while the estimate for revenues implies an improvement of 4.9% from the respective prior-year figures.
The consensus mark for AIZ’s 2024 earnings has moved 3.3% north in the past 60 days. Shares of Assurant have gained 29.9% in the past year.
Kemper’s earnings outpaced estimates in two of the trailing four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 6.93%. The Zacks Consensus Estimate for KMPR’s 2024 earnings is pegged at $5.17 per share. A loss of 74 cents per share was incurred in the prior year.
The consensus mark for KMPR’s 2024 earnings has moved up 7.9% in the past 60 days. Shares of Kemper have gained 41.3% in the past year.