Aflac (AFL) is an insurance company that is well-known among dividend investors thanks to it’s long history of steady dividend increases. In fact, the stock is a member of the Dividend Aristocrats – a group of stocks with 25+ years of consecutive dividend increases.
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The company's business stability is remarkable...
With that said, many investors may be alarmed by looking at it's current stock price.
Earlier this month, Aflac was recommended in the Sure Dividend Newsletter when it was trading for $88. Today, it is trading for $45. What happened?
The explanation is simple: Aflac executed a 2-for-1 stock split. Each $88 share from earlier in March has been converted into two shares which are now trading at $45 - which are together worth $90!
You may be interested to know what causes a company to split its stock. Stock splits occur when a company's stock price rises so much that it becomes an unreasonable purchase for "average" investors.
In order for a high stock price to become a "problem," a company requires exceptional business performance. Aflac is no exception - the insurer has delivered 15.5% annualized returns since 1974.
This is amazing in hindsight, but what really matters is finding investments that will deliver market-beating returns moving forward.
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