Aflac Incorporated (NYSE: AFL) Main Sources For Future Growth

Investors are usually concerned with two issues, with regards to stock: what is the potential of growth in the stock and how fragile and vulnerable it is. Though, usually investors go for sure-shot stocks, many of them are risk takers and like to predict how and why a stock can grow.

As far as Aflac Incorporated (NYSE: AFL) is concerned, one can’t really pin down its future, but it can be guessed how it is capable enough to grow in the near future and in the longer run.

Short term developments for Aflac Incorporated (NYSE: AFL) include its bond with Japanese banks, insurances and post office baron, Japan Post. The alliance of Aflac Incorporated (NYSE: AFL) with Japan Post is already bearing fruit in the form of healthy dividends. Japan Post is largely responsible for cancer insurances all around the country. The alliance between Aflac Incorporated (NYSE: AFL) and Japan Post will expand as Aflac Incorporated (NYSE: AFL)’s insurance will grown from 10,000 locations to 20,000 at the end of 2015.

Aflac Incorporated (NYSE: AFL) has produced two new anti-cancer products. One of them is with Japan Post as far as distribution is concerned, while the other product is with another partner. These products will be offered at a relatively lower price to certain age groups. The research department of Aflac Incorporated (NYSE: AFL) should note that the company hasn’t penetrated the age group of 20-40 years old. It could be a great opportunity for Aflac Incorporated (NYSE: AFL), since it is now in a strong alliance with dominant post office conglomerate.

Aflac Incorporated (NYSE: AFL) earns handsomely through medical and life insurances. The company receives payments from consumers for years until they claim anything on the insurance policy. Aflac Incorporated (NYSE: AFL) earned $2.5 billion from the first nine months of this year. The profits came from investment income. Aflac Incorporated (NYSE: AFL) is currently receiving yield of 2.8 percent on investments in Japan, and 5.9 percent in U.S. If interest rates are to grow in both these countries, Aflac Incorporated (NYSE: AFL) will be able to extract higher yield, though, unfortunately that is quite unlikely. But that doesn’t mean the increases won’t happen at all.

Finally, the company’s long term revenue depends upon the economy of Japan. The country is currently indebted to other neighboring countries. The country is also facing inflation, but the bank of Japan has ensured that it will do whatever necessary to improve the situation. Bank of Japan will be printing money, and acquiring government bonds and assets. If Japan’s economy makes improvement, there will be no stopping Aflac Incorporated (NYSE: AFL) from surging to all- highs.

In any case, Aflac Incorporated (NYSE: AFL) is making profit from insurances, and its alliance with other companies, some of which are giant conglomerates. Japan’s economy will grow at some point, which will benefit Aflac Incorporated (NYSE: AFL) largely. However, Aflac Incorporated (NYSE: AFL) isn’t depending on that, it has lined up numerous sources of income for itself.