Dividend Increase | Aflac Incorporated (AFL)

Getting a pay raise while sitting on the couch?  Sign me up!  Thanks Aflac for another dividend increase!

There's an old Chinese proverb that says "the best time to plant a tree was 20 years ago, the next best time is now".  The reason for this is that it takes time for a tree to grow and prosper and for you to start reaping its benefits.  Dividend growth investing is much the same way.  It takes consistent saving and investing as well as time and patience to let the power of dividend growth take hold.

That's why one of my favorite things is when one of the companies I own decides to pay out more in dividends.  You mean I get a pay raise just for owning a small piece of a company?  Not going and doing R&D for new products or technology.  Not selling any products.  Not managing any employees or inventory.  Not making sales calls.  All I had to do was have the foresight to invest some of my savings in excellent companies.  


On January 31st the Board of Directors at Aflac Incorporated (AFL) approved an increase to their quarterly dividend.  The dividend payout was increased from $0.26 to $0.27.  That's a 3.9% increase from the prior payout.  Aflac is a Dividend Champion with 36 consecutive years of dividend increases.  Shares currently yield 2.24% based on the new annualized payout.

The new $0.27 dividend payment will be payable on March 1st to shareholders of record as of February 20th.

Since I own 146.822 shares of Aflac in my FI Portfolio this raise increased my forward 12-month dividends by $5.87.  This is the 7th dividend increase I've received from Aflac since initiating a position in February 2013.  The total organic dividend growth since I initiated a position has been 54.3%.  According to US Inflation Calculator the cumulative rate of inflation over that same time is 7.8%.  

A full screen version of this chart can be found here.

Aflac's dividend growth had a solid history of delivering 10%+ annual dividend growth; however, during and coming out of the financial crisis of 2008/09 dividend growth just hasn't returned like I had hoped.  That being said I still can't complain about mid to upper single digit annual dividend growth.

The 1-, 3-, 5- and 10-year rolling dividend growth rates since 1993 can be found in the following chart.  

A full screen version of this chart can be found here.

*2019's dividend assumes the new payout of $0.27 per share is maintained for the rest of 2019.

Wrap Up

This raise increased my forward dividends by $5.87 with me doing nothing.  That's right, absolutely nothing to contribute to their operations.  Based on my portfolio's current yield of 3.06% this raise is like I invested an extra $193 in capital.  Except that I didn't!  One of the companies I own just decided to send more cash my way.  

That's how you can eventually reach the crossover point where your dividends received exceed your expenses.  That's DIVIDEND GROWTH INVESTING AT WORK!  The beauty of the dividend growth investing strategy is that you build up your dividends through fresh capital investment as well dividend increases from the companies you own.

Thus far in 2019 I've received 6 total increases from 6 of the 52 companies held in my FI Portfolio.  In total my forward 12-month dividends have increased by $48.19.

My FI Portfolio's forward-12 month dividends increased to $6,702.32.  Including my FolioFirst portfolio's forward dividends of $92.17 brings my total taxable accounts dividends to $6,794.49.  My Roth IRA's forward 12-month dividends increased to $414.23.

Do you own shares of Aflac?  What other insurance companies do you own or look attractive to you?

Please share your thoughts below.