NEW YORK ( TheStreet) -- Aflac Inc (NYSE: AFL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, increase in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues rose by 11.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AFL's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • AFLAC INC has improved earnings per share by 8.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AFLAC INC increased its bottom line by earning $4.96 versus $3.19 in the prior year. This year, the market expects an improvement in earnings ($6.37 versus $4.96).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Insurance industry average, but is less than that of the S&P 500. The net income increased by 7.8% when compared to the same quarter one year prior, going from $690.00 million to $744.00 million.

Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus (Aflac), provides supplemental health and life insurance. The company has a P/E ratio of 10.9, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Aflac has a market cap of $20.09 billion and is part of the financial sector and insurance industry. Shares are down 22.5% year to date as of the close of trading on Monday.

You can view the full Aflac Ratings Report or get investment ideas from our investment research center.
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