Aflac flirts with $80 per share following news on credit rating

Shares of Aflac stock flirted with $80 per share Monday amid an overall upward stock market, with both the S&P 500 and the Dow Jones Industrials reaching all-time highs.

Aflac shares gained $1.43 apiece, or nearly 2 percent, out of the gate to reach $79.81, up from Friday’s close of $78.43 per share. The stock held onto much of that, setting a 52-week high of $79.86 before drifting lower to $79.26 during the afternoon and finishing trading up 88 cents per share.

The supplemental health and life insurer, headquartered on Wynnton Road in Columbus, has seen its stock rise about 20 percent since dipping to a 52-week low of $66.50 per share on Feb. 2 of this year.

The increase Monday follows good news last week from insurance ratings company A.M. Best, which affirmed the company’s “financial strength rating” of A-plus, which is “superior,” and the “stable” long-term issuer credit ratings of Aflac Inc.’s various subsidiary companies. Those include American Family Life Assurance Company of Columbus, incorporated in Omaha, Neb.; American Family Life Assurance Company of Columbus (its Japan branch); American Family Life Assurance Company of New York, based in Albany, N.Y.; and Continental American Insurance Company, headquartered in Columbia, S.C.

“The rating affirmations reflect Aflac’s continued strong risk-adjusted capitalization and financial flexibility, the company’s well-managed investment portfolio, which has performed favorably despite interest rate pressures in Japan and the United States, and its consistent operating earnings reported,” A.M. Best said in a news release last Tuesday.

“The ratings also reflect Aflac’s favorable reputation as market leader in the increasingly competitive supplemental/voluntary work site benefit space,” the ratings company said. “Partially offsetting these positive rating factors are the company’s challenges to grow sales of its products, particularly in the United States, and its need to further enhance distribution strategies, as well as macroeconomic pressures that exist within its Japan markets.”

Aflac’s stock has been trending above $70 per share since closing at $71.04 on Feb. 14. That progress has generated more interest from investors about the prospects of the company’s board of directors approving a stock split that would cut in half the price of each current share, but give shareholders twice the number of stock notes that they held before the split.

Dan Amos, Aflac’s chairman and chief executive officer, has noted the interest and bluntly let the public know that the criteria for possibly triggering such a stock split is in place.

“As I’ve stated in the past, we believe that our stock price should be above $75 per share for a period of six months before the board will consider a stock split,” Amos told those gathered at the firm’s May 1 annual meeting. “Now that is not $75 one day. That’s over a period of six months.”

Aflac stock has closed above $73 per share since April 10, with it fluctuating up and down since then. It hasn’t closed lower than $75.14 per share since May 30.

This story was originally published June 19, 2017 at 12:03 PM with the headline "Aflac flirts with $80 per share following news on credit rating."