AFL
Aflac Incorporated
Financial Services · Insurance - Life · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- AFL scores well on profitability (21.2% net margin, 26.4% operating margin) and financial health (debt-to-equity of 0.29, interest coverage of 20.9), which anchor the composite score.
- The growth factor weighs heavily against the total score, as revenue, net income, and EPS all contracted significantly in FY2025, driving a low growth sub-score.
- The absence of a macro theme assignment means AFL receives no theme-related credit, capping the overall composite score and contributing to the Research Further label.
Why Not Higher
- The sharp FY2025 declines in revenue (-9.3%), net income (-33.0%), and diluted EPS (-29.2%) represent broad-based contraction that significantly penalizes the growth factor and limits the total score.
- With no active macro theme assignment, AFL misses out on theme-related score credit entirely, preventing a higher composite result regardless of its underlying business quality.
Data Confidence
9 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue declined from $18,927,000,000 in FY2024 to $17,164,000,000 in FY2025, a drop of 9.3%. Net income fell from $5,443,000,000 in FY2024 to $3,646,000,000 in FY2025, a decline of 33.0%, while diluted EPS dropped from $9.63 in FY2024 to $6.82 in FY2025, a decrease of 29.2%.
The model penalized AFL heavily for broad-based contraction across all three key growth metrics in FY2025, with particularly sharp declines in earnings and per-share profitability driving the low sub-score.
In FY2025, AFL posted a net margin of 21.2%, an operating margin of 26.4%, and a return on equity of 12.4%.
These figures indicate that AFL retains a substantial share of revenue as profit and generates meaningful returns for shareholders, which the model rewarded with a high profitability sub-score.
In FY2025, AFL carried a debt-to-equity ratio of 0.29 and an interest coverage ratio of 20.9, against a total asset base of $116,470,000,000.
A low debt-to-equity ratio and very high interest coverage signal conservative leverage and strong capacity to service debt obligations, which the model recognized with a solid financial health sub-score.
Over the last four reported quarters, operating income rose from $822,000,000 in 2025Q2 to $1,994,000,000 in 2025Q3 and $1,572,000,000 in 2025Q4, before moderating to $1,225,000,000 in 2026Q1. Net income followed a similar pattern, climbing from $599,000,000 in 2025Q2 to $1,639,000,000 in 2025Q3, then settling at $1,019,000,000 in 2026Q1.
The model rewarded the pronounced mid-period surge in both earnings and operating income, and while the most recent quarter shows some deceleration from the peak, profitability remains well above the trough quarter, supporting a high momentum score.
AFL has grown its dividends per share consistently from $1.62 in FY2022 to $1.76 in FY2023, $2.08 in FY2024, and $2.35 in FY2025, while maintaining a dividend payout ratio of 32.9% in FY2025.
The model rewarded the unbroken multi-year dividend growth streak alongside a moderate payout ratio that leaves ample room for continued increases, reflecting both income reliability and financial sustainability.
AFL is not currently assigned to any of the 24 tracked macro themes.
Without an active macro theme assignment, the security does not receive theme-related score credit under the model's current methodology; this reflects a classification status rather than any judgment about the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Aflac (AFL) presents a mixed investment profile with a total model score of 59.9/100 and a High risk rating. The company demonstrates strong profitability and financial health, with a 21.2% net margin, 26.4% operating margin, and a conservative debt-to-equity ratio of 0.29, yet FY2025 saw meaningful top- and bottom-line contraction, with revenue falling 9.3% and net income declining 33.0% year-over-year. Quarterly momentum has recovered meaningfully from a mid-year trough, and AFL's dividend has grown consistently from $1.62 per share in FY2022 to $2.35 in FY2025, supported by a sustainable 32.9% payout ratio. The absence of an assigned macro theme limits additional score credit, contributing to the Research Further label.
Plain English
Aflac is a profitable, financially solid company that pays a growing dividend, but its revenues and earnings fell sharply in FY2025, and it doesn't fit neatly into any of the big investment trends the model tracks right now, so it scores in the middle and warrants more investigation before acting.
Bull Case vs. Bear Case
Bull Case
- AFL maintains strong profitability with a 21.2% net margin and 26.4% operating margin in FY2025, indicating the business retains a substantial share of revenue as profit even during a down year.
- The company's balance sheet is conservatively leveraged, with a debt-to-equity ratio of just 0.29 and an interest coverage ratio of 20.9, providing significant financial flexibility and debt-service capacity.
- AFL has grown dividends per share every year from $1.62 in FY2022 to $2.35 in FY2025, while keeping the payout ratio at a moderate 32.9%, signaling both income reliability and room for future increases.
Bear Case
- Revenue declined 9.3% from $18,927,000,000 in FY2024 to $17,164,000,000 in FY2025, reflecting broad-based top-line contraction that raises questions about near-term growth prospects.
- Net income fell sharply by 33.0% year-over-year, from $5,443,000,000 to $3,646,000,000, and diluted EPS dropped 29.2% from $9.63 to $6.82, representing a significant deterioration in earnings power.
- AFL is not assigned to any of the 24 tracked macro themes, meaning it receives no theme-related score credit and lacks a clear near-term macro tailwind under the current model framework.
What Could Change the Picture
Bullish Triggers
- A sustained rebound in quarterly earnings — building on the recovery from the 2025Q2 trough of $599,000,000 in net income toward and beyond the 2025Q3 peak of $1,639,000,000 — could signal that FY2025's annual decline was transitory.
- Continued dividend growth beyond the $2.35 per share recorded in FY2025, especially if paired with revenue stabilization, would reinforce the income and financial health thesis.
Bearish Triggers
- If the deceleration in operating income from $1,994,000,000 in 2025Q3 to $1,225,000,000 in 2026Q1 continues, it could indicate that the mid-period earnings surge was temporary rather than a durable recovery.
- Further annual revenue and net income declines beyond the already steep FY2025 drops would deepen concerns about structural deterioration in AFL's business.
Risk Profile
High RiskAFL's financial health metrics are reassuring — a debt-to-equity ratio of 0.29 and interest coverage of 20.9 indicate low leverage risk — but the High risk rating reflects the volatility in quarterly earnings, where net income swung from $599,000,000 in 2025Q2 to $1,639,000,000 in 2025Q3 before moderating to $1,019,000,000 in 2026Q1, alongside the steep annual earnings decline in FY2025.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.