Tuesday, September 13, 2011
I decided to make another move in this turbulent market. I can predict the future as well as the next guy...that is another way of saying I can't. I don't know if know is a great time to invest, but I do know that cash in the bank is a horrible investment. The more money I have working for me, and the larger my passive income stream grows the faster I can compound my growth. That's what it's all about for me.
I recently asked my readers what were they buying? A lot of readers seemed pretty keen on Aflac, Intel and a couple telecoms as well. As I've said a few times before, I like to walk the walk when I talk the talk. I don't post endless articles on this blog for pointless and endless reference. I rarely suffer from analysis paralysis. I share ideas with my readers and I engage an idea when I feel the time is appropriate.
On that note, I purchased 42 shares of Aflac Incorporated (AFL) for $34.74 a share on 9/9/11. I've listed reasons for my interest in Aflac quite a few times before. Aflac provides supplemental health and life insurance in the U.S. and Japan. Interestingly, approximately 80% of their earnings come from Japan. If you're looking for international exposure, this is it. I think it's a solid business that's facing headwinds just like a lot of companies are right now. They have some risky investments on the books right now including sovereign debt from some European nations. For anyone interested, you can view their investments here:
Aflac Investment Details
I think, overall, the solid market share, dividend increases and likely manageable claims from the Japanese earthquake make the current price very attractive. I believe the current market price has more than factored in some of the headwinds they face. They have a historically high yield at this time. My entry yield on purchase is 3.45%, which is pretty solid in my opinion. It will provide me with a yearly dividend of $50.40 based on the current payout. Financial stocks are risky right now, and I'm staying away from banks at the moment. I think insurance companies are pretty solid, however, and provide a lot of value since they fall under the financial sector umbrella. Overall, I'm pretty happy with this purchase.
As a side note, this was a tough decision. I ALMOST purchased Intel. I'm bullish on both and INTC may be a near-future purchase. We'll see.
S&P currently rates AFL a 4-star BUY with a 12-month target price of $42.00. Morningstar currently rates AFL as a 4-star value.
What do you think?
Thanks for reading.