- Investors wonder why Aflac, a dividend aristocrat, is trading at a P/E of 10, while the S&P is trading at a P/E of 17.
- Aflac has already sold insurance to 1/4th of Japanese households, so it is hard to sustain its past growth rate.
- Investors are also cautious to see that 40% of the company's assets have been invested in Japanese government bonds. Japan has the heaviest debt load in the world (238% GDP).
- Nevertheless, part of the low P/E is due to the last financial crisis, which made investors fearful of financial companies. Astute investors should utilize this situation.