Aflac Increases Dividend 16%

 |  About: Aflac Incorporated (AFL)
by: David I. Templeton, CFA

Earlier this week, Aflac (AFL) announced a 16.67% increase in the company's first quarter 2009 dividend. The new quarterly dividend will equal $0.28 per share versus 24 cents per share in the first quarter 2008. The estimated payout ratio on the new dividend is approximately 25%. This compares to the five-year average payout ratio of 19%. The company carries an S&P Earnings and Dividend Quality Ranking of A.

The company's third quarter earnings indicated net income fell to $100 million or $0.21 a share, from $420 million, or $0.85 a share, in the third quarter of 2007. About $198 million of the after-tax investment losses in the quarter partly stems from the company's decision to sell its holdings in Lehman Brothers (OTC:LEHMQ) and Washington Mutual (NYSE:WM) and impair its investment in Ford Motor (NYSE:F). Operating earnings, which exclude net realized investment gains and losses, were $493 million, or $1.02 a share.

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Aflac dividend analysis table October 25, 2008

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Aflac stock chart October 24, 2008

Disclosure: None