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Unum (UNM) Board Approves Dividend Hike & Share Buyback

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The board of directors of Unum Group (UNM - Free Report) recently hiked its quarterly dividend by 9.6% and approved a new $750 million share buyback program in a bid to share more profits with shareholders.

The new dividend payout is 28.5 cents per share, up from 26 cents paid earlier. The annualized dividend of $1.14 per share yields 3.4% based on the closing price of $33.28 as of May 23. Shareholders are expected to receive the increased amount in the third quarter of 2019.

Unum Group boasts an impressive track record of annual dividend raises. The latest hike marks the 11th straight year of increase, translating into a staggering 245% rise over more than a decade. Also, the Zacks Rank #3 (Hold) accident and health insurer’s dividend yield betters the industry average of 2.2%.  Given its financial position, the trend of continuous hikes is likely to continue.

Unum Group also engages in share repurchases. To that end, the board of directors authorized the buyback of $750 million worth of shares through Nov 23, 2020. The new program replaces the previous $750 million program, scheduled to expire on Nov 24, 2019.

With $100 million worth of shares bought back during the first quarter of 2019, Unum Group has repurchased shares amounting to $4.4 billion since the fourth quarter of 2008, lowering the share count by about 43%. The insurer’s concerted efforts to add shareholder value make its stock an attractive pick for yield-seeking investors.

A sturdy financial position, backed by consistent solid operational efficiency by core operations, enables the company to generate enough capital, which supports its shareholder-friendly moves.

Shares of Unum Group have rallied 13.3%, outperforming the industry’s increase of 12.3%. We believe that the company’s leading status as a writer of voluntary business in the United States, its conservative pricing and reservation practices plus strategic endeavors to boost shareholders’ value should help the stock retain the bull run.

 


    


Dividend hikes and share repurchases boost investor confidence in a stock. Recently, the board of directors of United Fire Group, Inc. (UFCS - Free Report) approved a 6.5% hike in its dividend while that of CNO Financial Group, Inc. (CNO - Free Report) raised the same by 10%. The board of Chubb Limited (CB - Free Report) announced a 3% hike in quarterly dividend.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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