Back to top

Image: Bigstock

Should Value Investors Buy Unum Group (UNM) Stock?

Read MoreHide Full Article

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is Unum Group (UNM - Free Report) . UNM is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 5.75, while its industry has an average P/E of 9.91. Over the past 52 weeks, UNM's Forward P/E has been as high as 7.46 and as low as 5.47, with a median of 6.43.

We also note that UNM holds a PEG ratio of 0.63. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UNM's industry currently sports an average PEG of 1.70. UNM's PEG has been as high as 1.03 and as low as 0.42, with a median of 0.54, all within the past year.

Another valuation metric that we should highlight is UNM's P/B ratio of 0.93. The P/B is a method of comparing a stock's market value to 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 1.65. UNM's P/B has been as high as 1.06 and as low as 0.62, with a median of 0.88, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. UNM has a P/S ratio of 0.73. This compares to its industry's average P/S of 1.17.

Finally, investors should note that UNM has a P/CF ratio of 5.32. 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 6.70. UNM's P/CF has been as high as 6.70 and as low as 4.71, with a median of 5.62, all within the past year.

These are just a handful of the figures considered in Unum Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that UNM is an impressive value stock right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Unum Group (UNM) - free report >>

Published in