Dan Amos, preaching to the faithful at Monday’s annual meeting of Aflac shareholders, laid out a simple fact he has recounted multiple times through the years — purchase the company’s stock and hold onto it, and ye shall be rewarded many times over.
“Those who invested in Aflac when the company was founded in 1955 have been extremely well rewarded,” said the supplemental health and life insurer’s chairman and chief executive officer. “Some of our original shareholders are here today and I am glad to have them here.”
Amos ticked off the startling numbers. Someone who bought 1,000 shares as Aflac was being founded by three Amos brothers nearly 60 years ago, paying $11,100, would find that investment valued at just over $119 million today. It would be generating annual cash dividends of $3 million alone, with those 1,000 shares — if none of them had been sold — now at 1.9 million after stock splits through the years.
A living and breathing example of such fortuitous investing — albeit on a smaller scale — is Hughes Brantley Jenkins, a retired teacher from the Valdosta, Ga., area who purchased $1,200 worth of Aflac stock in those early years.
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“My daddy bought some, my mother bought some and I bought some,” said Jenkins, 87, moments after the annual meeting at the Columbus Museum, his bride of nearly 50 years, Barbara, 77, by his side.
“I’ve still got the original certificates. I started out with maybe a little over 100 shares,” said Jenkins, who has let that original investment ride — not cashing in any shares — and watched that initial $1,200 investment grow to more than 200,000 shares and a value of $14 million a year or so ago.
“I’ve done pretty well with stocks period,” said Jenkins, who once went fishing in Florida with the late John Amos, one of the original founders. “I bought a lot of stocks, and that’s just one of them.”
Barbara Jenkins herself has a tidy 4,600 shares, which at today’s stock price would value them at just under $300,000. She pressed her husband a year ago to attend the annual meeting and they were back again this year, talking with Dan Amos and spending some time at the company.
“We came last year and I was so impressed with it. I just wanted to come back,” she said.
Not that anyone has to have been a decades-long investor to have made money with the company, headquartered on Wynnton Road in Columbus. Amos pointed out total return to shareholders, including reinvested dividends, over the past 10 years topped 90 percent. The firm’s cash dividend also has grown for 32 straight years, with it rising 5.6 percent just in 2014.
Other numbers factoring into the stream of cash coming into the firm include $22.7 billion in total revenue last year, leading to diluted net earnings, or profit, of $6.50 per share. The company also repurchased $1.2 billion in stock last year, with intentions of buying back $1.3 billion more in 2015.
“The way we manage business creates long-term value for our shareholders, and we appreciate investors like you who put their faith and confidence in our business,” Amos said.
The over-arching theme of the annual meeting was “Living the Legacy,” centered on the founding of the company by brothers John, Paul and William Amos 60 years ago, with Paul, the father of Dan Amos, the last to pass away last summer.
“It is amazing to me that in November we celebrate Aflac’s 60th anniversary,” Amos said Monday, kicking off the meeting. “Your support has helped to establish a strong foundation for our company. And we have done our best to be good stewards of your trust.”
The CEO, who clearly understands that Japan is a critical piece of Aflac’s business, mentioned as well the 40th anniversary last November of selling insurance policies in the Asian nation. That has gained the company great brand recognition there, he said, with nine out of 10 Japanese familiar with the Aflac brand, and the firm insuring one in four households there. Japan makes up more than three-quarters of Aflac’s overall revenue.
Rolling out a popular cancer policy in Japan in 2002 created a surge in sales, Amos noted, while landing Japan Post Holdings — that nation’s postal service — as a distributor a couple of years ago also shows tremendous promise for future sales.
In the U.S., meanwhile, Aflac’s name-brand recognition hit 96 percent last year, an all-time high, the CEO said, even amid the uncertainty generated with the litany of changes in the health-care sector.
The company, which spent about $100 million on various advertising initiatives last year, saw its recognition rival those of other insurance companies — Allstate, State Farm, Progressive and Geico — that spent $500 million-plus to make their brand names well-recognized in U.S. households.
“That’s why protecting the Aflac brand is one of my main responsibilities,” Amos said.
A key component of the company’s advertising campaign is the often-comical Aflac duck, which was introduced in 1999 and has appeared in a long string of commercials and as trivia elements on sports programming. The latest commercial, which finds the duck in a hair salon, highlighting the firm’s policy of paying insurance claims within a day, is scheduled to make its debut during the “Dancing With the Stars” finale on May 19.
A clip of the 30-second ad was shown to shareholders Monday, as was a commercial in Japan showing a young Japanese woman dealing with cancer, and a short video of claims specialist Veronica Jackson, discussing the impact of “One Day Pay” on customers.
Also shown at the annual meeting was a recent segment from the MSNBC show, “Morning Joe.” It included Aflac U.S. President Teresa White and Audrey Boone Tillman, the firm’s executive vice president and general counsel, discussing how Aflac fosters the success of women and minorities within the company. About 67 percent of its work force is women, they said.
Amos also touched on the myriad awards the company received in 2014, some of them for multiple years, including recognition for ethics, diversity and being one of the best places to work in the U.S. and Japan.