Intrinsic value of AFLAC - AFL

Previous Close

$80.82

  Intrinsic Value

$187.44

stock screener

  Rating & Target

str. buy

+132%

  Value-price divergence*

0%

Previous close

$80.82

 
Intrinsic value

$187.44

 
Up/down potential

+132%

 
Rating

str. buy

 
Value-price divergence*

0%

Our model is not good at valuating stocks of financial companies, such as AFL.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of AFL stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 32.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  7.69
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  0
  23,095
  23,626
  24,233
  24,915
  25,670
  26,499
  27,401
  28,378
  29,431
  30,560
  31,769
  33,058
  34,431
  35,890
  37,438
  39,079
  40,815
  42,652
  44,592
  46,641
  48,803
  51,083
  53,486
  56,019
  58,685
  61,493
  64,449
  67,559
  70,831
  74,272
Variable operating expenses, $m
 
  18,545
  18,972
  19,459
  20,007
  20,613
  21,279
  22,003
  22,788
  23,633
  24,540
  25,510
  26,546
  27,648
  28,819
  30,063
  31,380
  32,775
  34,249
  35,808
  37,453
  39,189
  41,020
  42,950
  44,983
  47,124
  49,379
  51,752
  54,250
  56,877
  59,641
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  18,307
  18,545
  18,972
  19,459
  20,007
  20,613
  21,279
  22,003
  22,788
  23,633
  24,540
  25,510
  26,546
  27,648
  28,819
  30,063
  31,380
  32,775
  34,249
  35,808
  37,453
  39,189
  41,020
  42,950
  44,983
  47,124
  49,379
  51,752
  54,250
  56,877
  59,641
Operating income, $m
  4,335
  4,550
  4,654
  4,774
  4,908
  5,057
  5,220
  5,398
  5,591
  5,798
  6,020
  6,258
  6,512
  6,783
  7,070
  7,375
  7,698
  8,041
  8,402
  8,785
  9,188
  9,614
  10,063
  10,537
  11,036
  11,561
  12,114
  12,696
  13,309
  13,954
  14,632
EBITDA, $m
  4,335
  4,594
  4,699
  4,820
  4,956
  5,106
  5,271
  5,450
  5,644
  5,854
  6,078
  6,319
  6,575
  6,848
  7,138
  7,446
  7,773
  8,118
  8,483
  8,869
  9,277
  9,707
  10,160
  10,638
  11,142
  11,673
  12,231
  12,819
  13,437
  14,088
  14,773
Interest expense (income), $m
  211
  220
  319
  424
  545
  680
  830
  994
  1,173
  1,367
  1,576
  1,800
  2,040
  2,296
  2,568
  2,858
  3,165
  3,490
  3,835
  4,199
  4,584
  4,991
  5,420
  5,872
  6,349
  6,851
  7,380
  7,937
  8,524
  9,141
  9,790
Earnings before tax, $m
  4,067
  4,330
  4,335
  4,350
  4,363
  4,377
  4,390
  4,404
  4,417
  4,431
  4,444
  4,458
  4,473
  4,487
  4,502
  4,518
  4,534
  4,550
  4,568
  4,586
  4,604
  4,624
  4,644
  4,665
  4,687
  4,710
  4,734
  4,759
  4,785
  4,813
  4,842
Tax expense, $m
  1,408
  1,169
  1,171
  1,174
  1,178
  1,182
  1,185
  1,189
  1,193
  1,196
  1,200
  1,204
  1,208
  1,212
  1,216
  1,220
  1,224
  1,229
  1,233
  1,238
  1,243
  1,248
  1,254
  1,260
  1,265
  1,272
  1,278
  1,285
  1,292
  1,299
  1,307
Net income, $m
  2,659
  3,161
  3,165
  3,175
  3,185
  3,195
  3,205
  3,215
  3,224
  3,234
  3,244
  3,255
  3,265
  3,276
  3,287
  3,298
  3,310
  3,322
  3,334
  3,347
  3,361
  3,375
  3,390
  3,405
  3,421
  3,438
  3,456
  3,474
  3,493
  3,513
  3,534

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  129,819
  132,729
  135,782
  139,271
  143,189
  147,530
  152,293
  157,480
  163,094
  169,143
  175,634
  182,578
  189,988
  197,878
  206,263
  215,161
  224,590
  234,571
  245,126
  256,278
  268,053
  280,478
  293,582
  307,393
  321,946
  337,273
  353,410
  370,395
  388,269
  407,073
  426,851
Adjusted assets (=assets-cash), $m
  129,819
  132,729
  135,782
  139,271
  143,189
  147,530
  152,293
  157,480
  163,094
  169,143
  175,634
  182,578
  189,988
  197,878
  206,263
  215,161
  224,590
  234,571
  245,126
  256,278
  268,053
  280,478
  293,582
  307,393
  321,946
  337,273
  353,410
  370,395
  388,269
  407,073
  426,851
Revenue / Adjusted assets
  0.000
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
Average production assets, $m
  430
  439
  449
  460
  473
  488
  503
  521
  539
  559
  581
  604
  628
  654
  682
  711
  742
  775
  810
  847
  886
  927
  971
  1,016
  1,064
  1,115
  1,168
  1,225
  1,284
  1,346
  1,411
Working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total debt, $m
  5,360
  7,781
  10,351
  13,289
  16,588
  20,243
  24,254
  28,621
  33,348
  38,441
  43,907
  49,754
  55,993
  62,636
  69,696
  77,188
  85,127
  93,531
  102,419
  111,809
  121,724
  132,186
  143,219
  154,848
  167,101
  180,007
  193,594
  207,896
  222,945
  238,778
  255,432
Total liabilities, $m
  109,337
  111,758
  114,328
  117,266
  120,565
  124,220
  128,231
  132,598
  137,325
  142,418
  147,884
  153,731
  159,970
  166,613
  173,673
  181,165
  189,104
  197,508
  206,396
  215,786
  225,701
  236,163
  247,196
  258,825
  271,078
  283,984
  297,571
  311,873
  326,922
  342,755
  359,409
Total equity, $m
  20,482
  20,971
  21,454
  22,005
  22,624
  23,310
  24,062
  24,882
  25,769
  26,725
  27,750
  28,847
  30,018
  31,265
  32,590
  33,995
  35,485
  37,062
  38,730
  40,492
  42,352
  44,316
  46,386
  48,568
  50,867
  53,289
  55,839
  58,522
  61,346
  64,317
  67,442
Total liabilities and equity, $m
  129,819
  132,729
  135,782
  139,271
  143,189
  147,530
  152,293
  157,480
  163,094
  169,143
  175,634
  182,578
  189,988
  197,878
  206,263
  215,160
  224,589
  234,570
  245,126
  256,278
  268,053
  280,479
  293,582
  307,393
  321,945
  337,273
  353,410
  370,395
  388,268
  407,072
  426,851
Debt-to-equity ratio
  0.262
  0.370
  0.480
  0.600
  0.730
  0.870
  1.010
  1.150
  1.290
  1.440
  1.580
  1.720
  1.870
  2.000
  2.140
  2.270
  2.400
  2.520
  2.640
  2.760
  2.870
  2.980
  3.090
  3.190
  3.290
  3.380
  3.470
  3.550
  3.630
  3.710
  3.790
Adjusted equity ratio
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,659
  3,161
  3,165
  3,175
  3,185
  3,195
  3,205
  3,215
  3,224
  3,234
  3,244
  3,255
  3,265
  3,276
  3,287
  3,298
  3,310
  3,322
  3,334
  3,347
  3,361
  3,375
  3,390
  3,405
  3,421
  3,438
  3,456
  3,474
  3,493
  3,513
  3,534
Depreciation, amort., depletion, $m
  0
  44
  45
  46
  47
  49
  50
  52
  54
  56
  58
  60
  63
  65
  68
  71
  74
  78
  81
  85
  89
  93
  97
  102
  106
  112
  117
  122
  128
  135
  141
Funds from operations, $m
  9,192
  3,205
  3,210
  3,221
  3,233
  3,244
  3,255
  3,267
  3,278
  3,290
  3,302
  3,315
  3,328
  3,341
  3,355
  3,369
  3,384
  3,399
  3,415
  3,432
  3,450
  3,468
  3,487
  3,507
  3,528
  3,550
  3,573
  3,597
  3,622
  3,648
  3,676
Change in working capital, $m
  3,205
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from operations, $m
  5,987
  3,205
  3,210
  3,221
  3,233
  3,244
  3,255
  3,267
  3,278
  3,290
  3,302
  3,315
  3,328
  3,341
  3,355
  3,369
  3,384
  3,399
  3,415
  3,432
  3,450
  3,468
  3,487
  3,507
  3,528
  3,550
  3,573
  3,597
  3,622
  3,648
  3,676
Maintenance CAPEX, $m
  0
  -43
  -44
  -45
  -46
  -47
  -49
  -50
  -52
  -54
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -93
  -97
  -102
  -106
  -112
  -117
  -122
  -128
  -135
New CAPEX, $m
  0
  -9
  -10
  -12
  -13
  -14
  -16
  -17
  -19
  -20
  -21
  -23
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
Cash from investing activities, $m
  -3,855
  -52
  -54
  -57
  -59
  -61
  -65
  -67
  -71
  -74
  -77
  -81
  -84
  -89
  -93
  -97
  -102
  -107
  -113
  -118
  -124
  -130
  -136
  -143
  -150
  -157
  -165
  -173
  -181
  -190
  -200
Free cash flow, $m
  2,132
  3,153
  3,156
  3,165
  3,174
  3,182
  3,191
  3,199
  3,208
  3,216
  3,225
  3,234
  3,243
  3,252
  3,262
  3,271
  3,282
  3,292
  3,303
  3,314
  3,326
  3,338
  3,351
  3,364
  3,378
  3,393
  3,408
  3,424
  3,440
  3,457
  3,476
Issuance/(repayment) of debt, $m
  376
  2,421
  2,570
  2,938
  3,299
  3,655
  4,010
  4,367
  4,727
  5,093
  5,466
  5,847
  6,239
  6,643
  7,060
  7,492
  7,939
  8,404
  8,887
  9,390
  9,915
  10,462
  11,033
  11,629
  12,253
  12,905
  13,588
  14,302
  15,050
  15,833
  16,653
Issuance/(repurchase) of shares, $m
  -1,376
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -961
  2,421
  2,570
  2,938
  3,299
  3,655
  4,010
  4,367
  4,727
  5,093
  5,466
  5,847
  6,239
  6,643
  7,060
  7,492
  7,939
  8,404
  8,887
  9,390
  9,915
  10,462
  11,033
  11,629
  12,253
  12,905
  13,588
  14,302
  15,050
  15,833
  16,653
Total cash flow (excl. dividends), $m
  1,167
  5,574
  5,726
  6,103
  6,472
  6,837
  7,201
  7,566
  7,935
  8,309
  8,691
  9,081
  9,482
  9,895
  10,322
  10,763
  11,221
  11,696
  12,190
  12,705
  13,241
  13,800
  14,384
  14,994
  15,631
  16,298
  16,995
  17,725
  18,490
  19,290
  20,129
Retained Cash Flow (-), $m
  -2,774
  -489
  -482
  -551
  -619
  -686
  -753
  -819
  -887
  -956
  -1,026
  -1,097
  -1,171
  -1,247
  -1,325
  -1,406
  -1,490
  -1,577
  -1,668
  -1,762
  -1,861
  -1,963
  -2,070
  -2,182
  -2,299
  -2,422
  -2,550
  -2,684
  -2,824
  -2,971
  -3,125
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  5,085
  5,244
  5,552
  5,853
  6,152
  6,449
  6,747
  7,048
  7,354
  7,665
  7,984
  8,311
  8,649
  8,997
  9,357
  9,731
  10,119
  10,523
  10,943
  11,380
  11,837
  12,314
  12,811
  13,332
  13,876
  14,446
  15,042
  15,666
  16,319
  17,004
Discount rate, %
 
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
 
  4,866
  4,781
  4,801
  4,777
  4,713
  4,613
  4,478
  4,313
  4,120
  3,903
  3,667
  3,414
  3,149
  2,877
  2,601
  2,327
  2,058
  1,798
  1,551
  1,320
  1,108
  916
  745
  596
  469
  362
  273
  203
  147
  104
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers various voluntary supplemental insurance products, including cancer plans, general medical indemnity plans, medical/sickness riders, care plans, living benefit life plans, ordinary life insurance plans, and annuities in Japan. The Aflac U.S. segment provides products designed to protect individuals from depletion of assets, which comprise accident, cancer, critical illness/critical care, hospital intensive care, hospital indemnity, fixed-benefit dental, and vision care plans; and loss-of-income products, such as life and short-term disability plans in the United States (U.S.). The company sells its products through sales associates and brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies. Aflac Incorporated was founded in 1955 and is headquartered in Columbus, Georgia.

FINANCIAL RATIOS  of  AFLAC (AFL)

Valuation Ratios
P/E Ratio 12.3
Price to Sales 1.4
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 5.5
Price to Free Cash Flow 5.5
Growth Rates
Sales Growth Rate 7.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 26.2%
Total Debt to Equity 26.2%
Interest Coverage 20
Management Effectiveness
Return On Assets 2.3%
Ret/ On Assets - 3 Yr. Avg. 2.4%
Return On Total Capital 11%
Ret/ On T. Cap. - 3 Yr. Avg. 11.9%
Return On Equity 13.9%
Return On Equity - 3 Yr. Avg. 15.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 18.9%
EBITDA Margin - 3 Yr. Avg. 19.7%
Operating Margin 19.1%
Oper. Margin - 3 Yr. Avg. 20%
Pre-Tax Margin 18%
Pre-Tax Margin - 3 Yr. Avg. 18.7%
Net Profit Margin 11.7%
Net Profit Margin - 3 Yr. Avg. 12.3%
Effective Tax Rate 34.6%
Eff/ Tax Rate - 3 Yr. Avg. 34.4%
Payout Ratio 24.7%

AFL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AFL stock intrinsic value calculation we used $22642 million for the last fiscal year's total revenue generated by AFLAC. The default revenue input number comes from 2016 income statement of AFLAC. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AFL stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for AFL is calculated based on our internal credit rating of AFLAC, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of AFLAC.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AFL stock the variable cost ratio is equal to 80.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AFL stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.1% for AFLAC.

Corporate tax rate of 27% is the nominal tax rate for AFLAC. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AFL stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AFL are equal to 1.9%.

Life of production assets of 10 years is the average useful life of capital assets used in AFLAC operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AFL is equal to 0%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $20482 million for AFLAC - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 401.48 million for AFLAC is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of AFLAC at the current share price and the inputted number of shares is $32.4 billion.

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COMPANY NEWS

▶ 3 Top Dividend Stocks in Insurance   [Aug-11-17 08:07PM  Motley Fool]
▶ How Safe Is Aflac's Dividend?   [Aug-09-17 08:32AM  Motley Fool]
▶ 3 Value Stocks for Retirement   [Aug-03-17 02:43PM  Motley Fool]
▶ Aflac beats 2Q profit forecasts   [Jul-27-17 09:55PM  Associated Press]
▶ Our Heroes and 'the Power to Do Good'   [Jul-26-17 04:05PM  PR Newswire]
▶ Aflac CEO to Present at Harvard Business School   [Jun-22-17 08:00AM  PR Newswire]
▶ ETFs with exposure to Aflac, Inc. : June 12, 2017   [Jun-12-17 01:47PM  Capital Cube]
▶ Aflac's No. 4 exec resigning to join private equity firm   [Jun-11-17 09:05AM  American City Business Journals]
▶ Aflac Moves Up to No. 126 on 2017 Fortune 500   [Jun-09-17 08:00AM  PR Newswire]
▶ Paul S. Amos, II, Resigns from Aflac   [Jun-08-17 04:30PM  PR Newswire]
▶ 6 Things You Didn't Know About Aflac   [Jun-07-17 10:44AM  Motley Fool]
▶ ETFs with exposure to Aflac, Inc. : May 31, 2017   [May-31-17 12:19PM  Capital Cube]
▶ Aflac CFO Calls Infrastructure Debt a 'Great Asset'   [May-15-17 03:36PM  Bloomberg Video]
▶ [$$] The Roundup   [May-01-17 10:10AM  The Wall Street Journal]
▶ Aflac Holds Its Own Despite Falling Revenue, Earnings   [Apr-27-17 07:06PM  Motley Fool]
▶ Aflac beats 1Q profit forecasts   [04:40PM  Associated Press]
▶ 3 Great Income Stocks That Could Double Their Dividends   [Apr-21-17 02:25PM  Motley Fool]
▶ Multiple Stocks Reach 52-Week Highs   [Apr-18-17 04:42PM  GuruFocus.com]
▶ ETFs with exposure to Aflac, Inc. : April 5, 2017   [Apr-05-17 04:15PM  Capital Cube]
▶ Aflac picks Chicago-based NXT Capital to manage new $500 million portfolio   [Apr-04-17 03:35PM  American City Business Journals]
▶ Aflac Announces Investment Partnership with NXT Capital   [Mar-31-17 08:00AM  PR Newswire]
▶ Aflac Named a TAG Top 40 Innovative Technology Company   [Mar-23-17 08:00AM  PR Newswire]
▶ What You Need to Know About the March Rate Hike   [Mar-20-17 04:13PM  GuruFocus.com]
▶ 3 Aflac Executives Honored by BLACK ENTERPRISE Magazine   [Mar-10-17 08:00AM  PR Newswire]
Stock chart of AFL Financial statements of AFL
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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