Why AFLAC Incorporated (AFL) Stock Is a Huge Bargain

Yet Aflac itself doesn’t see currency as an important element for long-term investors. As it discussed in its first-quarter earnings release, Aflac doesn’t actually convert between yen and dollars, making the issue one of financial reporting rather than true economic impact. Therefore, AFLAC Incorporated (NYSE:AFL) believes looking at currency-neutral metrics of its success is the better way to assess its business.

Moreover, a Japanese economic revival would have huge positive impacts on Aflac and its stock. Rising bond rates would enhance income in the company’s bond portfolio, adding to profits. A stronger economy would give more customers the chance to buy policies, adding to revenue growth.

Why Aflac’s future looks promising
Aflac itself believes in its future prospects, as company repurchases of Aflac stock returned $150 million to shareholders during the first quarter of 2013. That doesn’t guarantee further share-price gains, but the vote of confidence should reassure investors of the potential that the insurer has.

With the stock trading at less than nine times trailing and forward earnings, Aflac’s share price doesn’t truly reflect the full extent of its growth prospects. Japan’s recovery could provide the long-awaited catalyst to send AFLAC Incorporated (NYSE:AFL) stock much higher in the coming years.

The article Why Aflac Stock Is a Huge Bargain originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Aflac, UnitedHealth Group, and WellPoint. The Motley Fool owns shares of WellPoint.

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