Investing in Dividend Aristocrats usually means you might have to pay a higher price, but with the dGARP (Dividend Growth at a Reasonable Price) strategy, you can invest in dividend growth stocks that are priced below market value. This approach helps reduce the risk associated with dividend cuts or stagnant earnings. At Millionaire Mob, we look for investments that offer both growing dividend income and the chance for capital appreciation through earnings growth, ultimately benefiting the stock price.
When you find a Dividend Aristocrat priced attractively, act quickly because these opportunities don’t last long. These companies are known for their strong management, excellent operations, and financial discipline. Investing in Dividend Aristocrats is a proven strategy that often outperforms the S&P 500 and has lower volatility over the long term. These stocks are known for increasing dividends for at least 25 consecutive years, securing their reputation as top-tier dividend growth stocks.
Aflac, Incorporated (AFL) is a standout Dividend Aristocrat you should consider. Remember when insurers were undervalued due to low interest rates? That was a great time to buy, and now high-quality companies like Aflac are primed for strong growth, potentially offering substantial returns to shareholders. Aflac fits perfectly with our dGARP approach, which looks for Dividend Growth at a Reasonable Price.
Here’s a look at why Aflac is worth considering. Qualitatively, it’s known as the American Family Life Assurance Company, and it’s the largest provider of supplemental insurance in the U.S. Since 1955, Aflac has built a strong brand, easily recognized by its iconic commercials featuring the Aflac duck. They have a straightforward market strategy and a significant opportunity for growth as many eligible Americans haven’t yet adopted their services.
Reputation-wise, Aflac stands out. It has been on Fortune’s 100 Best Companies to Work For list for 17 years, Fortune’s America’s Most Admired Companies for 15 years, and Ethisphere’s World’s Most Ethical Companies for 10 years. It’s also been on the Dow Jones Sustainability Index North America for six years, demonstrating its strong ethical and sustainable practices.
Quantitatively, Aflac is financially robust, recognized as a leading insurer with cautious financial reporting. It has increased dividends annually for at least 25 years and has repurchased stock and issued dividends worth about $2 billion annually. The only concern has been a rise in its dividend payout ratio due to challenging market conditions. However, this is expected to improve with rising interest rates, benefitting from higher yields in reinvested assets, even though current bonds may lose value initially. This long-term benefit aligns with Aflac’s growth strategies looking forward.
Overall, Aflac is a high-quality insurer with a solid track record and attractive valuation. It offers a sense of security regarding your dividend income along with growth potential through earnings appreciation. For dividend growth investors, Aflac is an obvious choice. Consider whether you’ll add this Dividend Aristocrat to your investment portfolio. At Millionaire Mob, we’re on a quest to identify the next Dividend Kings or Aristocrats before they happen. Join us in this journey and elevate your investment strategy.