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Reasons Why Investors Should Retain Unum Group (UNM) Stock Now
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Unum Group (UNM - Free Report) has been gaining momentum, given its higher persistency, rising sales, upbeat guidance and sufficient liquidity.
Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2022 and 2023 earnings per share is pegged at $4.63 and $5.77, respectively, indicating growth of 6.4% and 24.6% year over year, respectively. The expected long-term earnings growth rate is 11.1%, which is higher than the industry average of 8.1%.
Earnings Surprise History
Unum Group has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in the other one, the average beat being 6.62%.
Zacks Rank & Price Performance
Unum Group currently carries a Zacks Rank #3 (Hold). Year to date, the stock has rallied 12% against the industry’s decline of 0.9%.
Image Source: Zacks Investment Research
Business Tailwinds
Estimates for 2022 have moved up 0.2% in the past seven days, reflecting investors’ optimism.
The Unum U.S. segment contributes a major share of premium income to Unum Group. The segment stands to gain from improving employment levels along with rising wages. The group life, and accidental death and dismemberment (AD&D) line of this segment should gain from higher persistency, favorable trends and natural growth.
Strong sales growth in both voluntary benefits and the individual disability lines, increase in dental and vision premium income, and strong improvement in the persistency in the voluntary benefits line are expected to drive the Unum U.S. segment.
The Unum International segment is well-poised for growth, owing to the solid performance at the Unum UK business. The solid persistency and continued successful placement of rate increases on the in-force block should drive growth of this segment.
Sales in both Unum UK and Unum Poland are likely to boost the international business segment of Unum Group.
Capital Position
The financial position of Unum Group continues to provide significant financial flexibility. The weighted average risk-based capital ratio for traditional U.S. insurance companies improved to nearly 395% and the holding company cash was $1.5 billion at the end of 2021. Notably, both were well above the targeted levels.
Solid Dividend History
Banking on stable cash flow, Unum Group has increased dividends, witnessing an eight-year CAGR (2015-2022) of 8.6%, with dividends currently yielding 4.4%, better than the industry average of 2.7%. This makes the stock an attractive pick for yield-seeking investors.
Upbeat Guidance
Unum Group remains optimistic about strong, multi-year earnings recovery, with an outlook for 45-55% growth in after-tax adjusted operating EPS by 2024. Strong earnings are expected for the second half of 2022 through 2024, with solid (4-6%) growth in the long run.
The bottom line of Cincinnati Financial surpassed estimates in each of the last four quarters, the average being 38.48%. Year to date, the insurer has rallied 8.2%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. Year to date, United Fire has rallied 19.2%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. Year to date, Arch Capital has rallied 3.5%.
The Zacks Consensus Estimate for ACGL’s 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past seven days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
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Reasons Why Investors Should Retain Unum Group (UNM) Stock Now
Unum Group (UNM - Free Report) has been gaining momentum, given its higher persistency, rising sales, upbeat guidance and sufficient liquidity.
Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2022 and 2023 earnings per share is pegged at $4.63 and $5.77, respectively, indicating growth of 6.4% and 24.6% year over year, respectively. The expected long-term earnings growth rate is 11.1%, which is higher than the industry average of 8.1%.
Earnings Surprise History
Unum Group has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in the other one, the average beat being 6.62%.
Zacks Rank & Price Performance
Unum Group currently carries a Zacks Rank #3 (Hold). Year to date, the stock has rallied 12% against the industry’s decline of 0.9%.
Image Source: Zacks Investment Research
Business Tailwinds
Estimates for 2022 have moved up 0.2% in the past seven days, reflecting investors’ optimism.
The Unum U.S. segment contributes a major share of premium income to Unum Group. The segment stands to gain from improving employment levels along with rising wages. The group life, and accidental death and dismemberment (AD&D) line of this segment should gain from higher persistency, favorable trends and natural growth.
Strong sales growth in both voluntary benefits and the individual disability lines, increase in dental and vision premium income, and strong improvement in the persistency in the voluntary benefits line are expected to drive the Unum U.S. segment.
The Unum International segment is well-poised for growth, owing to the solid performance at the Unum UK business. The solid persistency and continued successful placement of rate increases on the in-force block should drive growth of this segment.
Sales in both Unum UK and Unum Poland are likely to boost the international business segment of Unum Group.
Capital Position
The financial position of Unum Group continues to provide significant financial flexibility. The weighted average risk-based capital ratio for traditional U.S. insurance companies improved to nearly 395% and the holding company cash was $1.5 billion at the end of 2021. Notably, both were well above the targeted levels.
Solid Dividend History
Banking on stable cash flow, Unum Group has increased dividends, witnessing an eight-year CAGR (2015-2022) of 8.6%, with dividends currently yielding 4.4%, better than the industry average of 2.7%. This makes the stock an attractive pick for yield-seeking investors.
Upbeat Guidance
Unum Group remains optimistic about strong, multi-year earnings recovery, with an outlook for 45-55% growth in after-tax adjusted operating EPS by 2024.
Strong earnings are expected for the second half of 2022 through 2024, with solid (4-6%) growth in the long run.
Stocks to Consider
Some better-ranked insurers are Cincinnati Financial (CINF - Free Report) , United Fire Group (UFCS - Free Report) and Arch Capital Group (ACGL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Cincinnati Financial surpassed estimates in each of the last four quarters, the average being 38.48%. Year to date, the insurer has rallied 8.2%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. Year to date, United Fire has rallied 19.2%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. Year to date, Arch Capital has rallied 3.5%.
The Zacks Consensus Estimate for ACGL’s 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past seven days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.