Aflac's Dividend Ducks Soar Past the Flock With 43rd Straight Hike

Aflac Incorporated AFL raised its quarterly dividend for the first quarter of 2026 to 61 cents per share, up from 58 cents, extending its impressive record of dividend growth. Over the past five years, the insurer has raised its payout five times, achieving an annualized dividend growth rate of 14.8%. The latest 5.2% increase brings Aflac’s dividend yield to 2.14%, based on the Nov. 11 closing price of $113.79, comfortably above the industry average of 1.93%.

With this move, Aflac achieved 43 consecutive years of dividend hikes, underscoring its commitment to returning value to shareholders. In August, the company reinforced that stance by expanding its share repurchase program by 100 million shares. During the third quarter alone, Aflac repurchased 9.3 million shares worth $1 billion, leaving 121.6 million shares authorized for future buybacks as of September 2025.

These shareholder-focused actions are well supported by Aflac’s earnings base and solid balance sheet. Although the Zacks Consensus Estimate projects 2025 earnings to decline 0.4% year over year to $7.18 per share, it can comfortably cover the dividends. Earnings for 2026 are expected to rebound by 2.5% to $7.36 per share.

The insurer ended the third quarter with $6.8 billion in cash and equivalents and has a long-term debt-to-capital ratio of 23.24%, slightly better than the industry average of 23.41%. While free cash flow dipped 5% over the trailing 12-month period, steady recovery in its U.S. segment, with sales rising 3% to $1 billion so far this year, alongside product innovation, digital expansion and agent growth, should keep momentum strong.

Other Insurers’ Shareholder-Friendly Efforts

Peers, including Aon plc AON and Marsh & McLennan Companies, Inc. MMC, are also actively returning capital to shareholders through share repurchase programs and dividends.

Aon bought back 0.7 million Class A ordinary shares for around $250 million in the third quarter, leaving about $1.6 billion in repurchase capacity as of Sept. 30, 2025. Meanwhile, Marsh & McLennan bought back 1.9 million shares worth $400 million during the same period. MMC currently offers a dividend yield of 1.98%, while the same for AON stands at 0.85%, below AFL’s level.

Aflac’s Price Performance and Valuation

Shares of AFL have gained 10% in the year-to-date period compared with the industry’s growth of 8.4%.

From a valuation standpoint, Aflac trades at a forward price-to-earnings ratio of 15.57, up from the industry average of 12.66. AFL has a Value Score of C at present.

The stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research