Acquisition AFL

Aflac Inc Company LogoWell it has been about 3 months since the last acquisition and I feel like time has flew by leaving some major cobwebs on my fingers. The delay was primarily due to most of the monthly savings going towards the trip to Lithuania and the purchase of a new salvaged vehicle. I will talk more on that in time to come, but for the current period I am sure glad to get back into the buying game as that is the best way to increase your dividend income over time.  Sure dividend raises are great and all, though the fastest way to increase them dividend payouts are owning more and more shares of these great businesses.

Aflac Incorporated is a general business holding company which acts as a management company, overseeing the operations of its subsidiary American Family Life Assurance Company of Columbus (Aflac) by providing management services and capital. Aflac U.S. & Aflac Japan has a diversified portfolios of insurance plans designed to to help consumers pay for medical and non medical costs while also providing supplemental coverage for people who already have coverage. Its primary business is supplemental health and life insurance, making Aflac a number one insurance company in Japan while having presence in all 50 United States, Puerto Rico and Virgin Islands.

With this acquisition I chose to stay within the portfolio. With the recent market pullback, there were many company stock sales at a very attractive discounts. It did not get anywhere to Black Friday, but I will take the next best thing. It was a toss up between NSC, GSK and AFL. So I decided to go with AFL as I believe it is the best deal out of the three at this current time. It is near its 52 week low due to 2nd quarter profit drop so it took quite a tumble. I have been a long fan of this insurance company and even bigger of a corky duck that we see during the commercials. The dividend growth for this company has been outstanding over the years which I believe it will continue since their payout ratio is so low.

  • Dividend Yield: 2.5%
  • Payout Ratio: 23.8%
  • Forward P/E: 9.3
  • 31 Years of Dividend Raises

I purchased 18 shares for the price of $59.12 adding $26.64 to my annual income.

The 12-month dividend income increased to $2,483.

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14 Comments

  1. Dividend Mantra on August 7, 2014 at 15:57

    DV,

    Great buy there!

    I think AFL is one of the more compelling buys in the market right now. I’d be all over it as well, but I’m comfortable with 100 shares right now.

    Looking forward to reading about your recent adventures and the car you bought. 🙂

    Best regards.

    • DividendVet on August 7, 2014 at 20:01

      DM,

      Yeah you know there are a number of great buys right now, AFL seemed the most attractive to me. If I would have more capital to invest I would of definitely picked up a few more names, but I don’t.

      Yeah you know I had a simply great time in Lithuania, I hope to get some of my experiences posted soon.

      Don’t want to give away too much, but the car is quite a contender to your Corolla.

      Thanks for stopping by.

  2. DivHut on August 7, 2014 at 18:43

    AFL is a great long term buy in my opinion and has been a holding of mine for many, many years. With the recent price drop it is looking better and better to the dividend bloggers and I might want to add to my current position as well. We’ll see how the next few days of August play out. Thanks for sharing your recent buy.

    • DividendVet on August 7, 2014 at 20:12

      Absolutely! AFL has a great history of raising dividends and with their extremely low payout ratio I only believe it will get better with time. Lets hope for many more great years with this company.

      Take care.

  3. JC @ Passive-Income-Pursuit.com on August 8, 2014 at 07:29

    I added some AFL earlier this week as well and have used this little dip in the overall stock market to add to a lot of positions. I’m still looking to add to a few others before I start getting more selective with my purchases though.

    Looking forward to hearing about the trip.

    • DividendVet on August 8, 2014 at 09:25

      Yeah, you definitely went on quite a buying streak there. Good for you, I would have done the same thing because who knows when we get to see so many companies at discounted prices.

      Have a great day.

  4. Dividend Growth Journey on August 8, 2014 at 11:10

    Congrats on the purchase Vet. I don’t have much exposure to the insurance sector and AFL is something that I am looking at especially at such low P/E and with the stock near its 52 week low.

    • DividendVet on August 8, 2014 at 20:34

      Thank you. You can’t go wrong with a number of great companies at still low P/E and Aflac is just one of them.

      Take it easy.

  5. Seviay on August 9, 2014 at 15:56

    Have you ever looked at ACE within the insurance sector? Seems to be another solid choice to me

    • DividendVet on August 9, 2014 at 16:20

      I have not, I will check it out more in depth. But from the looks of it it sure looks like a nice dividend raiser with decent yield while having business in 170 countries. Thanks for food for thought.

      Take care.

  6. Captain Dividend on August 13, 2014 at 21:37

    Great buy on the August dip! It’s not easy finding a stock with a p/e ration as low as Aflac’s. Best of luck on your trip.

    Also I’ve nominated you for a Liebster award if you care to participate.

    Best of luck,
    CD

    • DividendVet on August 17, 2014 at 14:15

      Thank you for kind words. Aflac is a great company that I believe will be in business for many years and at such pow valuations who wouldn’t buy it.

      Thanks for the nomination for a Liebster award, I will try my best to get a post going on that, though no promises as just recently time has been a scarce recourse.

      Best of luck.

  7. David on August 17, 2014 at 03:59

    Great buy. If I have the fund, I’ll buy AFL too. I like the P/E of AFL.

    • DividendVet on August 17, 2014 at 14:20

      Yes indeed, there are a few things that jump out about AFL and P/E is one of them. Though, if you read the annual 10-K reports you can get to know the companies quite a bit as they usually provide some very important information to outsider investors.

      Best of luck building your own fund.

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