Aflac Inc (AFL): Today's Featured Insurance Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Aflac ( AFL) pushed the Insurance industry lower today making it today's featured Insurance laggard. The industry as a whole closed the day up 0.8%. By the end of trading, Aflac fell 91 cents (-1.9%) to $46.65 on average volume. Throughout the day, 3.3 million shares of Aflac exchanged hands as compared to its average daily volume of 2.7 million shares. The stock ranged in price between $46.35-$47.47 after having opened the day at $47.46 as compared to the previous trading day's close of $47.56. Other companies within the Insurance industry that declined today were: First Acceptance Corporation ( FAC), down 4.8%, MGIC Investment Corporation ( MTG), down 3.4%, Prudential Financial ( PRU), down 3.3%, and ING Groep N.V ( ING), down 3.3%.
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Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance. Aflac has a market cap of $22.62 billion and is part of the financial sector. The company has a P/E ratio of 8.8, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 9.9% year to date as of the close of trading on Tuesday. Currently there are 10 analysts that rate Aflac a buy, no analysts rate it a sell, and eight rate it a hold.

TheStreet Ratings rates Aflac as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the insurance industry could consider KBW Insurance ETF ( KIE) while those bearish on the insurance industry could consider Proshares Short Financials ( SEF).

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