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Unum Group (UNM) Up 63.6% in a Year: More Room to Run?
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Shares of Unum Group (UNM - Free Report) have gained 63.6% in a year compared with the industry's increase of 16.6%. The Zacks S&P 500 composite has decreased 15.6% in the said time frame. With a market capitalization of $7.9 billion, average volume of shares traded in the last three months was 1.5 million.
Image Source: Zacks Investment Research
The rally was largely driven by disciplined sales trends, strong persistency, favorable benefits experience and solid capital position.
This Zacks Rank #2 (Buy) insurer has a solid track record of beating earnings estimates in six of the last seven quarters.
Unum Group has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Unum Group’s 2022 earnings is pegged at $6.24, indicating a 43.4% increase from the year-ago reported figure on 0.6% higher revenues of $12 billion. The consensus estimate for 2023 earnings is pegged at $6.28, indicating a 0.6% increase from the year-ago reported figure on 2.2% higher revenues of $12.3 billion.
The expected long-term earnings growth rate is 12.2%, which is higher than the industry average of 8.6%.
Unum U.S. continues to benefit from disciplined sales trends, strong persistency in group lines and growth of new product lines like dental and vision. Adjusted operating income should gain from favorable benefits experience in group product lines and higher premium income.
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.
Higher net investment income, favorable benefits experience and premium income should drive the adjusted operating income of the Colonial Life Segment. This segment should gain from higher sales in prior periods, higher overall persistency, improving premium income and favorable risk results.
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.
The insurer increased dividends, which witnessed a nine-year CAGR (2014-2022) of 8%. The dividend yield is currently 3.3%, better than the industry average of 2.3%. UNM expects $200 million worth of shares buyback annually through 2024. This makes the stock an attractive pick for yield-seeking investors.
Unum Group also has an impressive Value Score of A. The insurer currently has a trailing 12-month P/B ratio of 0.91, lower than the industry range of 1.55. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 26.2%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 34.1%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 3.4% north, respectively, in the past 60 days.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 90.8%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.
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Unum Group (UNM) Up 63.6% in a Year: More Room to Run?
Shares of Unum Group (UNM - Free Report) have gained 63.6% in a year compared with the industry's increase of 16.6%. The Zacks S&P 500 composite has decreased 15.6% in the said time frame. With a market capitalization of $7.9 billion, average volume of shares traded in the last three months was 1.5 million.
Image Source: Zacks Investment Research
The rally was largely driven by disciplined sales trends, strong persistency, favorable benefits experience and solid capital position.
This Zacks Rank #2 (Buy) insurer has a solid track record of beating earnings estimates in six of the last seven quarters.
Unum Group has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Unum Group’s 2022 earnings is pegged at $6.24, indicating a 43.4% increase from the year-ago reported figure on 0.6% higher revenues of $12 billion. The consensus estimate for 2023 earnings is pegged at $6.28, indicating a 0.6% increase from the year-ago reported figure on 2.2% higher revenues of $12.3 billion.
The expected long-term earnings growth rate is 12.2%, which is higher than the industry average of 8.6%.
Unum U.S. continues to benefit from disciplined sales trends, strong persistency in group lines and growth of new product lines like dental and vision. Adjusted operating income should gain from favorable benefits experience in group product lines and higher premium income.
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.
Higher net investment income, favorable benefits experience and premium income should drive the adjusted operating income of the Colonial Life Segment. This segment should gain from higher sales in prior periods, higher overall persistency, improving premium income and favorable risk results.
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.
The insurer increased dividends, which witnessed a nine-year CAGR (2014-2022) of 8%. The dividend yield is currently 3.3%, better than the industry average of 2.3%. UNM expects $200 million worth of shares buyback annually through 2024. This makes the stock an attractive pick for yield-seeking investors.
Unum Group also has an impressive Value Score of A. The insurer currently has a trailing 12-month P/B ratio of 0.91, lower than the industry range of 1.55. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Kinsale Capital Group, Inc. (KNSL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Root, Inc. (ROOT - Free Report) . While Kinsale Capital sports a Zacks Rank #1 , W.R. Berkley and Root carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 26.2%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 34.1%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 3.4% north, respectively, in the past 60 days.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 90.8%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.