AFL

Slow growerQuality: Medium (60/100)2 red flags

Aflac · Financials · Life & Health Insurance

$118.20

52w 104.66 – 130.22

20y monthly, adjusted

Mkt cap

$59.3B

P/E

16.0

P/FCF

22.8

FCF yield

4.4%

ROE

12.4%

Shldr yield

8.1%

div 2.1% + bb 6.1%

What today's price assumes

At $59.3B, the market is pricing in 9.5% annual free-cash-flow growth for the next decade (10% discount rate, 2.5% terminal growth). Over the last ten years, FCF actually grew -9.3% per year — the price asks for acceleration beyond the historical record.

Simple DCF per-share range: $31 · $31 · $37 (4% / base / optimistic growth). An estimate, not a target.

Adjust the assumptions yourself →

Historical multiple lens

At its own median P/OCF of 3.9× across 19 years, AFL would trade near $20/share (25th–75th percentile: $13–$35); it trades at 23.2× today.

Assumes the historical multiple regime persists — re-ratings can be permanent.

Growth record

Compound annual growth rates from as-filed 10-K data, split-adjusted

Rev 3y

−3.6%

Rev 5y

−5.0%

Rev 10y

−1.9%

EPS 5y

+0.4%

EPS 10y

+8.3%

FCF 5y

−15.6%

FCF 10y

−9.3%

Fundamentals

Fiscal 2007–2025, from SEC filings

Revenue

2007: $15.4B

2008: $16.6B

2009: $18.3B

2010: $20.7B

2011: $22.2B

2012: $25.4B

2013: $23.9B

2014: $22.7B

2015: $20.9B

2016: $22.6B

2017: $21.7B

2018: $21.8B

2019: $22.3B

2020: $22.1B

2021: $21.6B

2022: $19.1B

2023: $18.7B

2024: $18.9B

2025: $17.2B

$0$10.0B$20.0B

Net income

2007: $1.6B

2008: $1.3B

2009: $1.5B

2010: $2.3B

2011: $2.0B

2012: $2.9B

2013: $3.2B

2014: $3.0B

2015: $2.5B

2016: $2.7B

2017: $4.6B

2018: $2.9B

2019: $3.3B

2020: $4.8B

2021: $4.2B

2022: $4.4B

2023: $4.7B

2024: $5.4B

2025: $3.6B

$0$2.0B$4.0B

Free cash flow

2007: $4.7B

2008: $5.0B

2009: $6.2B

2010: $7.0B

2011: $10.8B

2012: $15.0B

2013: $10.5B

2014: $6.5B

2015: $6.8B

2016: $6.0B

2017: $6.1B

2018: $6.0B

2019: $5.5B

2020: $6.0B

2021: $5.1B

2022: $3.9B

2023: $3.2B

2024: $2.7B

2025: $2.6B

$0$5.0B$10.0B$15.0B

Diluted shares (lower is better)

2007: 944.0M

2008: 915.1M

2009: 896.4M

2010: 904.1M

2011: 897.0M

2012: 896.9M

2013: 893.3M

2014: 867.6M

2015: 827.8M

2016: 827.8M

2017: 797.9M

2018: 774.6M

2019: 746.4M

2020: 716.2M

2021: 676.7M

2022: 637.7M

2023: 598.7M

2024: 565.0M

2025: 534.9M

0250.0M500.0M750.0M

Margins

Net marginFCF margin

Capital returned (dividends + buybacks)

2007: $979.0M

2008: $1.9B

2009: $534.0M

2010: $656.0M

2011: $860.0M

2012: $721.0M

2013: $1.4B

2014: $1.9B

2015: $2.0B

2016: $2.1B

2017: $2.0B

2018: $2.1B

2019: $2.4B

2020: $2.3B

2021: $3.2B

2022: $3.4B

2023: $3.8B

2024: $3.9B

2025: $4.7B

$0$2.0B$4.0B

Cash vs long-term debt

CashLT debt

Quarterly

Discrete quarters from 10-Q filings; Q4 derived as fiscal year minus Q1–Q3. OCF is unwound from the year-to-date figures 10-Qs report. Compare to the same quarter a year ago — most businesses are seasonal.

Revenue by quarter

Q2'23: $5.2B

Q3'23: $5.0B

Q4'23: $3.8B

Q1'24: $5.4B

Q2'24: $5.1B

Q3'24: $2.9B

Q4'24: $5.4B

Q1'25: $3.4B

Q2'25: $4.2B

Q3'25: $4.7B

Q4'25: $4.9B

Q1'26: $4.3B

Q2'26: $4.1B

$0$2.0B$4.0B

Net income by quarter

Q2'23: $1.6B

Q3'23: $1.6B

Q4'23: $268.0M

Q1'24: $1.9B

Q2'24: $1.8B

Q3'24: −$93.0M

Q4'24: $1.9B

Q1'25: $29.0M

Q2'25: $599.0M

Q3'25: $1.6B

Q4'25: $1.4B

Q1'26: $1.0B

Q2'26: $825.0M

$0$500.0M$1.0B$1.5B

Quarter	Revenue	YoY	Net income	YoY	EPS	OCF
Q2'26	$4.1B	−1.0%	$825.0M	+37.7%	1.63	$112.0M
Q1'26	$4.3B	+27.9%	$1.0B	+3413.8%	1.98	$968.0M
Q4'25 *	$4.9B	−10.0%	$1.4B	−27.5%	2.58	$315.0M
Q3'25	$4.7B	+60.7%	$1.6B	—	3.08	$1.3B
Q2'25	$4.2B	−19.0%	$599.0M	−65.9%	1.11	$399.0M
Q1'25	$3.4B	−37.5%	$29.0M	−98.5%	0.05	$589.0M
Q4'24 *	$5.4B	+43.1%	$1.9B	+609.7%	3.45	$333.0M
Q3'24	$2.9B	−40.4%	−$93.0M	−105.9%	-0.17	$1.3B
Q2'24	$5.1B	−0.7%	$1.8B	+7.4%	3.10	$255.0M
Q1'24	$5.4B	+13.3%	$1.9B	+58.2%	3.25	$849.0M
Q4'23	$3.8B	−4.3%	$268.0M	+36.7%	0.46	$582.0M
Q3'23	$5.0B	+5.2%	$1.6B	−11.9%	2.64	$1.3B
Q2'23	$5.2B	−2.7%	$1.6B	+17.2%	2.71	$442.0M

Track record

Compound annual growth by period. For debt and share count, negative is the good direction.

Series	3y	5y	10y	15y
Revenue	−3.6%	−5.0%	−1.9%	−1.3%
Operating cash flow	−13.0%	−15.6%	−9.3%	−6.5%
Free cash flow	−13.0%	−15.6%	−9.3%	−6.5%
EPS (diluted)	−0.5%	+0.4%	+8.3%	+6.7%
Equity	+13.6%	−2.6%	+5.2%	+7.1%
LT debt	—	—	—	—
Diluted shares	−5.7%	−5.7%	−4.3%	−3.4%
Stock price	+18.9%	+18.4%	+14.9%	+15.7%

$100, 3 years ago

$168vs $176 in SPY

18.9% vs 20.7%/yr

$100, 5 years ago

$232vs $181 in SPY

18.4% vs 12.6%/yr

$100, 10 years ago

$400vs $412 in SPY

14.9% vs 15.2%/yr

$100, 15 years ago

$895vs $813 in SPY

15.7% vs 15.0%/yr

The $1 test — market value created per $1 of earnings retained (Buffett's hurdle: at least $1)

Last 5 years

$1.75

$30.2B created / $17.3B retained

Last 10 years

$1.25

$40.0B created / $31.9B retained

Quality & capital discipline

Cash-based returns and how management deploys capital

Cash ROIC

8.7%

OCF ÷ (equity + debt)

OCF / EV yield

4.9%

MC vs 10× OCF

2.28

≤1 = priced under 10× OCF

Debt / FCF

—

SBC / FCF

—

Owner earnings

$2.6B

OCF − capex − SBC

OE yield

4.4%

Share count 5y

−3.1%

per year; negative = buybacks

Checklist

13 of 23 checks pass · 57%. Checks with structurally missing inputs are excluded.

Growth & Consistency

2/7

Revenue growth
-5.0% · 5y CAGR ≥ 5%
fail
EPS growth
0.4% · 5y CAGR ≥ 5%
fail
FCF growth
-15.6% · 5y CAGR ≥ 5%
fail
Revenue rises consistently
3 of 9 · up in ≥ 7 of last 10 years
fail
FCF consistently positive
10 of 10 · positive in ≥ 8 of last 10 years
pass
Profitable every year
10 of 10 · net income > 0 in ≥ 8 of last 10
pass
Cash flow keeps up with sales
-15.6% vs -5.0% · OCF CAGR ≥ 0.9× revenue CAGR
fail

Profitability

3/5

Net margin
21.2% · ≥ 8%
pass
Operating margin
— · ≥ 10%
na
Gross margin stable or rising
— · no drop > 2 pts over 3y
na
Return on equity
12.4% · ≥ 12%
pass
Cash ROIC
8.7% · ≥ 12%
fail
FCF margin
14.9% · ≥ 5%
pass
Earnings back their cash
OCF $2.6B vs NI $3.6B · OCF ≥ net income (latest FY)
fail

Balance Sheet

3/4

Debt payable from cash flow
no debt · LT debt ≤ 3× FCF
pass
Cash cushion
— · cash ≥ 50% of LT debt
pass
Leverage
— · LT debt ≤ 1.5× equity
pass
Equity positive and compounding
$29.5B · equity > 0 and grew over ~5y
fail
Interest burden
— · interest ≤ 15% of operating income
na

Capital Allocation

2/3

Share count flat or shrinking
-3.1% · ≤ +0.5%/yr over ~5y
pass
Stock comp restrained
— · SBC ≤ 15% of FCF
na
Distributions funded by FCF
185% · dividends + buybacks ≤ 100% of FCF
fail
Repurchases are a habit
10 of 10 · buybacks in ≥ 5 of last 10 years
pass

Valuation Discipline

3/4

FCF yield
4.4% · ≥ 3%
pass
Earnings multiple
16.0 · P/E ≤ 25
pass
Price asks less than history delivered
9.5% vs -9.3% · implied FCF growth ≤ historical FCF CAGR
fail
Shareholder yield
8.1% · dividends + buybacks ≥ 2% of market cap
pass

Red flags

Mechanical checks — a flag is a question to investigate, not a verdict

Revenue declining

Latest fiscal-year revenue fell more than 3% versus the prior year.

Distributions exceed FCF

Dividends plus buybacks exceeded free cash flow in the latest fiscal year.

Financial data

As filed in 10-Ks; per-share figures split-adjusted. $ in millions.

FY	Revenue	Gross profit	Op income	Net income	EPS	OCF	CapEx	FCF	Dividends	Buybacks	SBC	Cash	LT debt	Equity	Shares
2025	17,164	—	—	3,646	6.82	2,555	—	2,555	1,198	3,530	—	6,245	—	29,490	535
2024	18,927	—	—	5,443	9.63	2,707	—	2,707	1,087	2,800	—	6,229	—	26,098	565
2023	18,701	—	—	4,659	7.78	3,190	—	3,190	966	2,801	—	4,306	—	21,985	599
2022	19,140	—	4,157	4,418	6.93	3,879	—	3,879	979	2,401	—	3,943	—	20,140	638
2021	21,554	—	4,934	4,231	6.25	5,051	—	5,051	855	2,301	—	5,051	—	17,031	677
2020	22,147	—	4,416	4,778	6.67	5,958	—	5,958	769	1,537	—	5,141	—	33,559	716
2019	22,307	—	4,461	3,304	4.43	5,455	—	5,455	771	1,627	—	4,896	—	28,959	746
2018	21,758	—	4,354	2,920	3.77	6,014	—	6,014	793	1,301	—	4,337	—	23,462	775
2017	21,667	—	4,087	4,604	5.77	6,128	—	6,128	661	1,351	—	3,491	—	24,598	798
2016	22,559	—	4,117	2,659	3.21	5,987	—	5,987	658	1,422	—	4,859	—	20,482	828
2015	20,872	—	4,001	2,533	3.06	6,776	—	6,776	656	1,315	—	4,350	—	17,708	828
2014	22,728	—	4,253	2,951	3.40	6,550	—	6,550	654	1,210	—	4,658	—	18,347	868
2013	23,939	—	4,399	3,158	3.54	10,547	—	10,547	635	813	—	2,543	—	14,620	893
2012	25,364	—	4,658	2,866	3.20	14,952	—	14,952	603	118	—	2,041	—	15,978	897
2011	22,171	—	4,544	1,964	2.19	10,842	—	10,842	552	308	—	2,249	—	12,946	897
2010	20,732	—	4,007	2,344	2.59	6,989	—	6,989	535	121	—	2,121	—	10,540	904
2009	18,254	—	3,435	1,497	1.67	6,161	—	6,161	524	10	—	2,323	—	8,417	896
2008	16,554	—	—	1,254	1.37	4,965	—	4,965	434	1,490	—	941	—	6,639	915
2007	15,393	—	—	1,634	1.73	4,656	—	4,656	373	606	—	1,563	—	8,795	944

Some concepts are structurally absent for certain industries (banks report no gross profit or capex). Missing ≠ zero.

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