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Reasons Why Unum Group (UNM) Stock is an Attractive Pick Now
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Unum Group (UNM - Free Report) is well-poised for growth, driven by higher persistency, favorable trends and natural growth, improved underlying benefits experience and higher premium income.
Optimistic Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2022 earnings is pegged at $6.12, indicating a 40.69% increase from the year-ago reported figure on 1.08% higher revenues of $12.1 billion. The consensus estimate for 2023 earnings is pegged at $6.14, indicating a 0.28% increase from the year-ago reported figure on 2.6% higher revenues of $12.4 billion.
The expected long-term earnings growth rate is 14.9%, which is higher than the industry average of 10%.
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 30.13%.
Zacks Rank & Price Performance
UNM currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 50.6% outperforming the industry’s increase of 10.3%.
Image Source: Zacks Investment Research
Style Score
UNM has a favorable VGM Score of A. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Business Tailwinds
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, an increase in dental and vision premium income, and strong improvement in persistency in the voluntary benefits line are expected to drive the Unum U.S. segment.
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.
Sales in both Unum UK and Unum Poland are likely to boost the international business segment of Unum Group.
Stable persistency, growth in premium income, higher net investment income owing to higher income from bond calls and favorable benefits experience are likely to drive the Colonial Life segment.
Unum Group boasts a solid capital position. Sustained solid operating results have been fueling a solid level of statutory earnings and capital, cushioning financial flexibility.
Banking on operational excellence, Unum Group increased dividends, which witnessed an eight-year CAGR (2015-2022) of 8.6%. The dividend yield is currently 3.2%, better than the industry average of 2.6%. This makes the stock an attractive pick for yield-seeking investors. Unum projects $200 million worth of shares buyback annually through 2024.
Unum Group has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Unum Group also has an impressive Value Score of A. The insurer currently has a trailing 12-month P/B ratio of 0.85, lower than the industry range of 1.28.
Other Stocks to Consider
Some other top-ranked stocks in the insurance industry are ProAssurance Corporation (PRA - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While ProAssurance sports a Zacks Rank #1 (Strong Buy), American Financial and Axis Capital carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 15.2%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 60 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 5.3%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 2.7% and 3.1% north, respectively, in the past 60 days.
The bottom line of Axis Capital surpassed earnings estimates in each of the last four quarters, the average being 48.08%. In the past year, the insurer has rallied 5.1%.
The Zacks Consensus Estimate for Axis Capital’s 2022 and 2023 earnings indicates a 25.2% and 9.71% increase, respectively from the year-ago reported figure.
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Reasons Why Unum Group (UNM) Stock is an Attractive Pick Now
Unum Group (UNM - Free Report) is well-poised for growth, driven by higher persistency, favorable trends and natural growth, improved underlying benefits experience and higher premium income.
Optimistic Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2022 earnings is pegged at $6.12, indicating a 40.69% increase from the year-ago reported figure on 1.08% higher revenues of $12.1 billion. The consensus estimate for 2023 earnings is pegged at $6.14, indicating a 0.28% increase from the year-ago reported figure on 2.6% higher revenues of $12.4 billion.
The expected long-term earnings growth rate is 14.9%, which is higher than the industry average of 10%.
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 30.13%.
Zacks Rank & Price Performance
UNM currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 50.6% outperforming the industry’s increase of 10.3%.
Image Source: Zacks Investment Research
Style Score
UNM has a favorable VGM Score of A. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Business Tailwinds
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, an increase in dental and vision premium income, and strong improvement in persistency in the voluntary benefits line are expected to drive the Unum U.S. segment.
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.
Sales in both Unum UK and Unum Poland are likely to boost the international business segment of Unum Group.
Stable persistency, growth in premium income, higher net investment income owing to higher income from bond calls and favorable benefits experience are likely to drive the Colonial Life segment.
Unum Group boasts a solid capital position. Sustained solid operating results have been fueling a solid level of statutory earnings and capital, cushioning financial flexibility.
Banking on operational excellence, Unum Group increased dividends, which witnessed an eight-year CAGR (2015-2022) of 8.6%. The dividend yield is currently 3.2%, better than the industry average of 2.6%. This makes the stock an attractive pick for yield-seeking investors. Unum projects $200 million worth of shares buyback annually through 2024.
Unum Group has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Unum Group also has an impressive Value Score of A. The insurer currently has a trailing 12-month P/B ratio of 0.85, lower than the industry range of 1.28.
Other Stocks to Consider
Some other top-ranked stocks in the insurance industry are ProAssurance Corporation (PRA - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While ProAssurance sports a Zacks Rank #1 (Strong Buy), American Financial and Axis Capital carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 15.2%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 60 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has lost 5.3%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 2.7% and 3.1% north, respectively, in the past 60 days.
The bottom line of Axis Capital surpassed earnings estimates in each of the last four quarters, the average being 48.08%. In the past year, the insurer has rallied 5.1%.
The Zacks Consensus Estimate for Axis Capital’s 2022 and 2023 earnings indicates a 25.2% and 9.71% increase, respectively from the year-ago reported figure.