Long-established in the Insurance industry, Aflac Inc (AFL, Financial) has enjoyed a stellar reputation. It has recently witnessed a surge of 1.79%, juxtaposed with a three-month change of 16.07%. However, fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Aflac Inc.
Decoding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- 1. Financial strength rank: 6/10
- 2. Profitability rank: 6/10
- 3. Growth rank: 5/10
- 4. GF Value rank: 1/10
- 5. Momentum rank: 10/10
Based on the above method, GuruFocus assigned Aflac Inc the GF Score of 69 out of 100, which signals poor future outperformance potential.
Understanding Aflac Inc's Business
Aflac Inc, with a market cap of $44.25 billion, offers supplemental health insurance and life insurance in the two largest insurance markets in the world, the U.S. and Japan. The company has broadened its product offerings to include accident, disability, and long-term-care insurance. It markets its products through independent distributors, selling most of its policies directly to consumers at their places of work. However, its operating margin is currently not applicable due to insufficient data.
Why Aflac Inc May Underperform
Despite Aflac Inc's strong momentum rank, its financial strength, profitability, and growth metrics are less impressive. The GuruFocus Score Rating highlights the firm's potential underperformance. The company's financial strength and profitability ranks are both 6/10, while its growth rank is even lower at 5/10. The GF Value rank, which assesses the valuation of a company, is only 1/10, indicating that the stock may be overvalued. These factors combined suggest that Aflac Inc may struggle to maintain its recent performance.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
