Quack, Quack

Most people know about Aflac (NYSE: AFL) because of its quirky marketing campaigns featuring a talking duck. But those who use Aflac’s supplemental insurance products know how valuable they can be, providing much-needed coverage for areas in which most traditional health insurance doesn’t pay benefits. From policies designed to cover specific health conditions to accident and short-term disability coverage, Aflac fills in gaps that the insurance industry has largely ignored, and that’s allowed the insurer to prosper. Aflac actually gets most of its business from Japan, where its cancer insurance policies are so ubiquitous that they’re even sold in the post office. The company’s geographical diversification has often helped Aflac smooth out its growth and avoid hiccups that have hurt rivals that focus solely on one country. For dividend investors, Aflac has an impressive 36-year streak of increasing its payouts. The recent yield of 2.3 percent isn’t extremely large, but the insurer hiked its payout by almost 16 percent earlier this year. With conditions remaining favorable in the insurance industry, Aflac is poised to retain its status as a leading provider of profitable supplemental coverage for millions of customers. Its reasonable valuation (featuring a single-digit price-to-earnings (P/E) ratio), growing dividend and healthy balance sheet also make it worth consideration. (The Motley Fool has recommended Aflac.)