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Aflac Quacks Up a 4.9% Dividend Hike: But is it Sustainable?
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Key Takeaways
Aflac raised its first-quarter 2027 dividend 4.9% to 64 cents a share, extending 44 years of increases.
Aflac's third-quarter net income slid to $303 million from $1.6 billion, largely due to investment losses.
Its U.S. pretax adjusted earnings grew 31.5%, while cash and equivalents totaled $5.62 billion at Q3-end.
Aflac Incorporated (AFL - Free Report) recently raised its quarterly dividend by 4.9% to 64 cents per share for the first quarter of 2027, up from 61 cents in the fourth quarter of 2026. The payment is scheduled for March 1, 2027, for shareholders on record as of Feb. 17. The hike builds on the insurer’s 44 consecutive years of dividend increases, underscoring predictable shareholder distributions.
Aflac is lifting payouts despite a difficult headline earnings quarter. Third-quarter 2026 net income fell to $303 million from $1.6 billion, largely reflecting investment losses tied to portfolio repositioning. Adjusted earnings totaled $1.21 billion, down 8.5%.
Still, Aflac returned $1.1 billion to shareholders during the quarter, including $804 million in buybacks and $305 million in dividends. Moreover, at third-quarter end, AFL had 90 million shares available for repurchase under existing authorizations. The move signals confidence in maintaining shareholder returns without compromising financial flexibility.
Supporting this confidence, its U.S. business delivered 31.5% growth in pretax adjusted earnings, providing a counterweight to pressure in Japan. That mix, alongside ongoing capital discipline, helps explain why management remains comfortable raising dividends. Aflac exited the third quarter with cash and cash equivalents of $5.62 billion and adjusted debt of $7.94 billion.
At the new rate, Aflac’s annualized dividend rises to $2.56 per share, versus $2.44 previously. The dividend yield, based on the payout and Nov. 11 closing market price of $127.11, is approximately 2.01%, which seems safe and a bit higher than the industry average of 1.86%.
How Are Peers Placed?
Companies like Unum Group (UNM - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) are also prioritizing shareholder returns. Unum raised its quarterly dividend nearly 10% to 50.5 cents per share in 2026, translating into an annualized payout of $2.02. During the third quarter, UNM returned roughly $280 million through dividends and buybacks, despite recording a net loss driven largely by investment losses.
Meanwhile, CNO lifted its quarterly dividend 5.9% to 18 cents, marking its 14th consecutive annual increase. CNO also repurchased $180 million of shares in the first nine months of 2026. Both companies continue emphasizing capital distributions despite differing earnings trends.
Aflac’s Price Performance, Valuation & Estimates
Shares of AFL have gained 15.2% in the year-to-date period compared with the industry’s growth of 12.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, Aflac trades at a forward price-to-earnings ratio of 16.60, up from the industry average of 13.51. AFL has a Value Score of D at present.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Aflac’s 2026 earnings is pegged at $7.29 per share, implying a 2.7% decrease from the year-ago period.
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Aflac Quacks Up a 4.9% Dividend Hike: But is it Sustainable?
Key Takeaways
Aflac Incorporated (AFL - Free Report) recently raised its quarterly dividend by 4.9% to 64 cents per share for the first quarter of 2027, up from 61 cents in the fourth quarter of 2026. The payment is scheduled for March 1, 2027, for shareholders on record as of Feb. 17. The hike builds on the insurer’s 44 consecutive years of dividend increases, underscoring predictable shareholder distributions.
Aflac is lifting payouts despite a difficult headline earnings quarter. Third-quarter 2026 net income fell to $303 million from $1.6 billion, largely reflecting investment losses tied to portfolio repositioning. Adjusted earnings totaled $1.21 billion, down 8.5%.
Still, Aflac returned $1.1 billion to shareholders during the quarter, including $804 million in buybacks and $305 million in dividends. Moreover, at third-quarter end, AFL had 90 million shares available for repurchase under existing authorizations. The move signals confidence in maintaining shareholder returns without compromising financial flexibility.
Supporting this confidence, its U.S. business delivered 31.5% growth in pretax adjusted earnings, providing a counterweight to pressure in Japan. That mix, alongside ongoing capital discipline, helps explain why management remains comfortable raising dividends. Aflac exited the third quarter with cash and cash equivalents of $5.62 billion and adjusted debt of $7.94 billion.
At the new rate, Aflac’s annualized dividend rises to $2.56 per share, versus $2.44 previously. The dividend yield, based on the payout and Nov. 11 closing market price of $127.11, is approximately 2.01%, which seems safe and a bit higher than the industry average of 1.86%.
How Are Peers Placed?
Companies like Unum Group (UNM - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) are also prioritizing shareholder returns. Unum raised its quarterly dividend nearly 10% to 50.5 cents per share in 2026, translating into an annualized payout of $2.02. During the third quarter, UNM returned roughly $280 million through dividends and buybacks, despite recording a net loss driven largely by investment losses.
Meanwhile, CNO lifted its quarterly dividend 5.9% to 18 cents, marking its 14th consecutive annual increase. CNO also repurchased $180 million of shares in the first nine months of 2026. Both companies continue emphasizing capital distributions despite differing earnings trends.
Aflac’s Price Performance, Valuation & Estimates
Shares of AFL have gained 15.2% in the year-to-date period compared with the industry’s growth of 12.5%.
From a valuation standpoint, Aflac trades at a forward price-to-earnings ratio of 16.60, up from the industry average of 13.51. AFL has a Value Score of D at present.
The Zacks Consensus Estimate for Aflac’s 2026 earnings is pegged at $7.29 per share, implying a 2.7% decrease from the year-ago period.
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.