Is Aflac (AFL) Headed for a Breakout?

Aflac Inc. (AFL) offers supplemental health insurance and life insurance in the two largest insurance markets in the world, the U.S. and Japan. In addition to its cancer policies, the company has broadened its product offerings to include accidents, disability, and long-term-care insurance…

Aflac’s (AFL) U.S segment is set up for growth due to its buyout of Argus Dental and Vision as well as Zurich North America’s U.S. Corporate Life and Pensions business. AFL should also benefit from a strong product pipeline this year and cost-cutting initiatives.

AFL’s debt-to-equity ratio of 0.2 indicates it is on solid financial footing. The company has grown earnings an average of 14.4% per year over the past five years, but earnings are down 7.1% over the past year. However, analysts expect earnings to rise 18.7% year over year in the current quarter.

The stock looks undervalued right now with a forward P/E of 10.68. AFL was showing bullish momentum from November of last year into June of this year. However, performance has been mixed since, as shown in the chart below.

Take a look at the 1-year chart of AFL below with added notations…

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