Thursday, February 8, 2018

Recent Buy: AFLAC Incorporated (AFL)

The recent volatility in the market opened up some great buying opportunities. I just love when the market goes down, because stocks essentially go on sale. When the overall market goes down, has anything really changed about the company you are buying? Are they still selling products/goods/services? Are they still paying a dividend? If yes to both of those questions then you don't have much to worry about. 




Did you know that most companies continued to pay dividends during the 2008-2009 recession? Some of these companies even increased dividends during that period.

Price and yield are inversely correlated and when the market goes down all the dividend yields go up! This means your money you invest will earn you even more money!

Now, I know I said I probably wouldn't be able to invest any money this month, but with some of the volatility there were just too many good buying opportunities. I also received a $500 bonus from work that helped allow me to be able to buy. 

I ended up purchasing 13 shares of AFLAC Incorporated (AFL) for $83.90 a share. This purchase adds $27.04 of yearly dividend income to my portfolio. 

AFLAC has been on my list for a long time, but I never had the chance to buy until now. They tend to be a very boring company in terms of stock price, but they don't disappoint in terms of dividend growth. 

Some quick facts about AFLAC:
  • 35 years of dividend increases
  • 2.45% current dividend yield
  • P/E of 7.8
  • Payout ratio of about 19% (tons of room for dividend growth)
  • EPS grew 12.4% over the past 5 years
  • 10 year dividend growth rate at 8.1%
These are a lot of reasons to love the company.  

They sell insurance in the US and Japan for individuals and groups. Almost everyone has and needs insurance. AFLAC is a pretty well known company and most everyone knows their duck mascot when they see it on TV. 

There may be some more volatility in the upcoming months for the market. This will present more buying opportunities. Hopefully I can free up some more capital in March to purchase some more stock. 

Let me know what you guys think! Did you buy any stock on the recent weakness?

2 comments:

  1. This is interesting. After a colleague spoke to me about their success with dividend investment I'm really curious to learn more and to consider trying it myself... But first I'll have to get educated.

    ReplyDelete
    Replies
    1. Yes, definitely. I have really enjoyed dividend growth investing and it is truly amazing to see the dividends grow each year. A great example is AbbVie (ABBV) who just raised their dividend 35%!

      Delete