Inside Aflac's Dividend Increase

| About: Aflac Incorporated (AFL)

As promised, AFLAC (NYSE:AFL) just announced a dividend increase for the fourth quarter of 30 cents per share. This is an increase of 7.1% over the current dividend of 28 cents per share.

This is AFLAC’s 28th consecutive annual dividend increase and it will continue AFLAC’s membership in the S&P Dividend Aristocrats. This dividend, however, is a rather wimpy and back-handed way to deliver your 28th in a row. They're doing it just so they can say they've done it.

The downside is that AFLAC waited until the fourth quarter to increase its dividend. Also, the dividend increase is much smaller than what AFL has been churning out. The company had raised its dividend by at least 12% every year since 1991.

AFLAC also said that it’s resuming its share repurchase program after suspending it during the financial crisis. Dan Amos, the CEO, said, “Depending on market conditions, we may purchase up to three million shares as early as the fourth quarter of this year. We currently anticipate buying six to 12 million shares in 2011.”

That’s equal to $300 million to $600 million, or roughly 64 cents per share to $1.28 per share. I would much rather see that go to cash dividends.

Disclosure: None