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Here's Why You Should Retain Unum Group (UNM) Stock Now
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Unum Group (UNM - Free Report) has been gaining momentum, given its higher new sales, a rise in income in the group disability line of business, upbeat guidance and sufficient liquidity.
Optimistic Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2022 earnings is pegged at $4.56, indicating a 4.8% increase from the year-ago reported figure on 1.3% higher revenues of $12.1 billion. The consensus estimate for 2023 earnings is pegged at $5.75, indicating a 26.1% increase from the year-ago reported figure on 2.5% higher revenues of $12.4 billion.
The expected long-term earnings growth rate is 11.7%, which is higher than the industry average of 8.4%.
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
UNM currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 16.2% compared with the industry’s growth of 22.1%.
Image Source: Zacks Investment Research
Business Tailwinds
The solid performances of the Unum U.S., Colonial Life and Unum International segments poised Unum Group for long-term growth.
The Unum U.S. segment of the insurer stands to gain from strong persistency in group lines and growth of new product lines like dental and vision, higher new sales, and rising income in the group disability line of business.
Stable persistency, growth in premium income, higher net investment income on higher income from bond calls, and favorable benefits experience should continue to drive the Colonial Life segment.
The Unum International segment has witnessed a consistent increase in income over the past several quarters. The primary driver of the international segment’s results is the Unum UK business, which continued to improve with strong persistency, good sales and the successful placement of rate increases on the in-force block. Sales in Unum UK and Unum Poland continued to remain strong.
The Unum International segment remains well-poised for growth on improved underlying benefits experience, particularly in the group lifeline, growth in the in-force block and a higher exchange rate.
Capital Position
Unum Group boasts a strong capital position with substantial financial flexibility. The weighted average risk-based capital ratio for traditional U.S. insurance companies improved to nearly 395% and holding company cash was $1.5 billion by 2021-end, both well above the targeted levels.
Effective Capital Deployment
Banking on operational excellence, Unum Group has increased dividends, witnessing an eight-year CAGR (2015-2022) of 8.6%, with dividends currently yielding 3.8%, better than the industry average of 2.5%. This makes the stock an attractive pick for yield-seeking investors.
UNM’s capital plans include share repurchase, dividends, and the funding of the premium deficiency reserve with increased free cash flow post-2024. Unum Group expects a strong level of capital return, with anticipated dividend increases annually and $200 million of annual repurchases.
Upbeat Guidance
Unum Group expects 2022 after-tax adjusted operating EPS growth of 4-7%, suggesting continuing impacts of COVID mortality in the first half of 2022 and recovery in the second half of 2022.
Unum Group remains optimistic about strong, multi-year earnings recovery, with an improvement in after-tax adjusted operating EPS of 45-55% by 2024, with strategies in place to drive this growth.
Unum Group anticipates statutory operating income to recover to the pre-pandemic levels over the next three years. It established the baseline for 4-6% growth in after-tax adjusted operating income beyond 2024, with further enhancements from continued share repurchases.
Estimates for 2023 have moved up 0.2% in the past seven days, reflecting investors’ optimism.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the CINF stock has rallied 31.4%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 9.8%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, KNSL has rallied 42.4%.
The Zacks Consensus Estimate for Kinsale Capital’s 2022 and 2023 earnings has moved 5.9% and 8.2% north, respectively, in the past 60 days.
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Here's Why You Should Retain Unum Group (UNM) Stock Now
Unum Group (UNM - Free Report) has been gaining momentum, given its higher new sales, a rise in income in the group disability line of business, upbeat guidance and sufficient liquidity.
Optimistic Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2022 earnings is pegged at $4.56, indicating a 4.8% increase from the year-ago reported figure on 1.3% higher revenues of $12.1 billion. The consensus estimate for 2023 earnings is pegged at $5.75, indicating a 26.1% increase from the year-ago reported figure on 2.5% higher revenues of $12.4 billion.
The expected long-term earnings growth rate is 11.7%, which is higher than the industry average of 8.4%.
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
UNM currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 16.2% compared with the industry’s growth of 22.1%.
Image Source: Zacks Investment Research
Business Tailwinds
The solid performances of the Unum U.S., Colonial Life and Unum International segments poised Unum Group for long-term growth.
The Unum U.S. segment of the insurer stands to gain from strong persistency in group lines and growth of new product lines like dental and vision, higher new sales, and rising income in the group disability line of business.
Stable persistency, growth in premium income, higher net investment income on higher income from bond calls, and favorable benefits experience should continue to drive the Colonial Life segment.
The Unum International segment has witnessed a consistent increase in income over the past several quarters. The primary driver of the international segment’s results is the Unum UK business, which continued to improve with strong persistency, good sales and the successful placement of rate increases on the in-force block. Sales in Unum UK and Unum Poland continued to remain strong.
The Unum International segment remains well-poised for growth on improved underlying benefits experience, particularly in the group lifeline, growth in the in-force block and a higher exchange rate.
Capital Position
Unum Group boasts a strong capital position with substantial financial flexibility. The weighted average risk-based capital ratio for traditional U.S. insurance companies improved to nearly 395% and holding company cash was $1.5 billion by 2021-end, both well above the targeted levels.
Effective Capital Deployment
Banking on operational excellence, Unum Group has increased dividends, witnessing an eight-year CAGR (2015-2022) of 8.6%, with dividends currently yielding 3.8%, better than the industry average of 2.5%. This makes the stock an attractive pick for yield-seeking investors.
UNM’s capital plans include share repurchase, dividends, and the funding of the premium deficiency reserve with increased free cash flow post-2024. Unum Group expects a strong level of capital return, with anticipated dividend increases annually and $200 million of annual repurchases.
Upbeat Guidance
Unum Group expects 2022 after-tax adjusted operating EPS growth of 4-7%, suggesting continuing impacts of COVID mortality in the first half of 2022 and recovery in the second half of 2022.
Unum Group remains optimistic about strong, multi-year earnings recovery, with an improvement in after-tax adjusted operating EPS of 45-55% by 2024, with strategies in place to drive this growth.
Unum Group anticipates statutory operating income to recover to the pre-pandemic levels over the next three years. It established the baseline for 4-6% growth in after-tax adjusted operating income beyond 2024, with further enhancements from continued share repurchases.
Estimates for 2023 have moved up 0.2% in the past seven days, reflecting investors’ optimism.
Stocks to Consider
Some better-ranked stocks from the insurance sector are Cincinnati Financial Corporation (CINF - Free Report) , United Fire Group, Inc. (UFCS - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the CINF stock has rallied 31.4%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 9.8%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, KNSL has rallied 42.4%.
The Zacks Consensus Estimate for Kinsale Capital’s 2022 and 2023 earnings has moved 5.9% and 8.2% north, respectively, in the past 60 days.