Zacks Investment Ideas feature highlights: Aflac

For Immediate Release

Chicago, IL – November 15, 2022 – Today, Zacks Investment Ideas feature highlights Aflac Inc. AFL.

Insurance Behemoth Soars Amid Renewed Market Strength

A glimmer of hope was cast upon the stock market last week, as lower-than-expected inflation data from October ignited the largest weekly rally since March. With many stocks beginning to show strength, investors may be wondering if the momentum can continue. Stocks that held up well this year illustrated their immunity to the volatility, and in past bear markets we’ve often seen these stocks continue their bullish runs as the market turns the corner.

It remains to be seen if this recent move is actually the bottom or just another bear market rally. Certainly, investors applauded the mild CPI print, but lingering macroeconomic headwinds remain. And while the market is a forward-looking mechanism – typically bottoming well before relevant economic data – we may not be out of the woods just yet.

So as tempting as it may be to pull the trigger on those beaten down technology stocks, the more prudent approach is to stick with the current leaders until we have more evidence in hand that growth names can put together a sustained rally.

Despite a very difficult year for most stocks, we’ve seen pockets of strength in several different sectors such as insurance. These pockets have illustrated resilience, and rather than succumb to higher inflation, they’ve actually benefited from higher prices.

The Zacks Insurance – Accident and Health industry group is ranked in the top 7% out of approximately 250 industry groups. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform the market over the next 3 to 6 months.

Quantitative research studies have shown that roughly half of a stock’s price appreciation can be attributed to its industry group. By focusing on stocks within the top-rated groups, we can dramatically improve our odds of success. Let’s take a deeper look at a stock that is breaking out to the upside within this leading industry.

Aflac Inc.

Aflac provides supplemental health and life insurance products. The company offers accident, short-term disability, cancer, critical illness, dental, vision, long-term care and disability, and term and whole life insurance products in the U.S. and Japan. AFL sells its products through sales associates, brokers, independent corporate agencies, and individual agencies.

AFL has exceeded earnings estimates in each of the past four quarters, with an average surprise of 4.83% over that timeframe. The insurance giant most recently reported Q3 EPS last month of $1.23/share, a 0.82% beat over consensus estimates. Sales during the third quarter rose 4.43% to $4.82 billion, also surpassing estimates. Shares have bucked the trend this year, rising nearly 23% and recently hitting a 52-week high.

As if investors needed another reason to consider this stock, the company has a strong capital management strategy in place. AFL has raised its dividend for 39 straight years, illustrating its ability to consistently navigate uncertain economic environments. In addition, during the first half of 2022, Aflac repurchased $1.2 billion worth of shares.

As the market looks to close out 2022 on a positive note, make sure to keep an eye on AFL and the insurance space as the group as well as the stock appear primed to continue their outperformance.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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