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Is Unum Group (UNM) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

Unum Group (UNM - Free Report) is a stock many investors are watching right now. UNM is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 6.03 right now. For comparison, its industry sports an average P/E of 10.43. Over the past year, UNM's Forward P/E has been as high as 7.46 and as low as 5.47, with a median of 6.52.

UNM is also sporting a PEG ratio of 0.80. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UNM's PEG compares to its industry's average PEG of 1.86. Over the past 52 weeks, UNM's PEG has been as high as 1.03 and as low as 0.42, with a median of 0.54.

Another notable valuation metric for UNM is its P/B ratio of 0.88. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.50. Within the past 52 weeks, UNM's P/B has been as high as 1.06 and as low as 0.58, with a median of 0.84.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UNM has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.63.

Finally, investors should note that UNM has a P/CF ratio of 5.44. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. UNM's current P/CF looks attractive when compared to its industry's average P/CF of 6.93. Over the past year, UNM's P/CF has been as high as 6.63 and as low as 4.67, with a median of 5.65.

These are only a few of the key metrics included in Unum Group's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, UNM looks like an impressive value stock at the moment.


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