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In an effort to distribute more profit among shareholders, the board of directors of Unum Group (UNM - Analyst Report) authorized an increase of 11.5% in its dividend. The company will now pay a quarterly dividend of 14.5 cents per share, up from 13 cents per share paid on May 17, 2013.

The increased dividend will be paid in third quarter of 2013. The new annualized rate comes to 58 cents per share and represents a yield of 2.1% based on Thursday’s closing price of $27.56.

The dividend yield compare favorably with the industry average of 1.50% as well as with other accident and health insurer Amerisafe, Inc. (AMSF - Analyst Report) with a yield of 0.98% and Employers Holdings, Inc. (EIG - Snapshot Report) with a yield of 0.97%.

With this approval, Unum Group hiked dividend for five straight years. Moreover, the new dividend represents 93.3% increase from the 7.5 cents per share paid in 2007.

Based on the 270.4 million shares outstanding as of Mar 31, 2013, the company requires $39.2 million for the payment of the quarterly dividend. Unum Group’s continued sturdy operational results coupled with strong capital positive provide it sufficient cushion to hike dividend as well as pay the same uninterruptedly.

Besides dividend hikes, Unum Group have embarked on share repurchases to enhance its shareholders value. Its first quarter 2013 share buybacks totaled $95 million or 3.7 million shares. The company was left with $454.9 million under its authorization.

Recently, ACE Limited (ACE - Analyst Report), which offers accident and health insurance, at its extraordinary general meeting held on May 16, 2013, approved the board’s proposal to hike the quarterly dividend to 51 cents. The increased dividend represents an increase of 4% from 49 cents paid earlier.

Unum Group currently carries a Zacks Rank #3 (Hold).

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