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Headquartered in Columbus, Georgia, Aflac Incorporated (AFL) is a holding company providing management services and capital to its subsidiaries. Valued at a market cap of $61.7 billion, its main business is voluntary supplemental and life insurance offered through Aflac U.S. and Aflac Japan.
Companies worth $10 billion or more are generally described as "large-cap stocks," and Aflac fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the life insurance industry.
Aflac has a strong market presence in Japan and the U.S. and offers a diverse range of insurance products, including cancer, accident, and long-term care insurance, appealing to a wide customer base. Its strategic marketing through independent distributors and direct-to-consumer channels, especially in workplaces, has enhanced its market position.
Shares of Aflac are just marginally down from its 52-week high of $111.14, achieved on Sept. 4. They have gained 26.6% over the past three months, outperforming the broader Nasdaq Composite’s ($NASX) marginal fall over the same time frame.
In the longer term, AFL stock posted a 33.5% YTD gain compared to NASX's 17.2% returns. Besides, over the past 52 weeks, it has outperformed the index with a 44% surge, surpassing NASX's 28.3% returns.
AFL has consistently traded over the 200-day moving average since last year and above its 50-day moving average since early May, indicating a long-term bullish trend.
A combination of reduced benefits and claims, streamlined operating expenses, robust investment income, and strong premium sales growth across both segments fuels AFL's impressive market performance.
On Jul. 31, AFL shares rose marginally after the company reported Q2 earnings results that exceeded Street expectations, with an adjusted EPS of $1.83 and revenue of $5.1 billion. A new product launch, including future nursing care coverage, boosted sales at its Japanese unit by 4.5%.
Aflac’s rival, MetLife, Inc. (MET), outperforms AFL. Shares of MetLife are up 17% on a YTD basis and 17.9% over the past 52 weeks.
Despite strong price momentum, analysts remain cautious, adopting a neutral stance on AFL's outlook. It has a consensus rating of “Hold” from the 16 analysts covering it, and the stock currently trades above the mean price target of $96.43.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
