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Here's Why Hold Strategy is Apt for Unum Group (UNM) Now
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Unum Group (UNM - Free Report) is well-poised for growth on the back of disciplined sales trends, strong persistency, an improving rate environment, favorable risk experience and solid capital.
Optimistic Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2023 earnings is pegged at $7.49, indicating a 20.6% increase from the year-ago reported figure on 2.4% higher revenues of $12.30 billion. The consensus estimate for 2024 earnings is pegged at $7.81, indicating a 4.2% increase from the year-ago reported figure on 3.5% higher revenues of $12.74 billion.
The expected long-term earnings growth rate is 8.4%, which is higher than the industry average of 6.5%.
Northbound Estimate Revision
Estimates for 2023 and 2024 have moved up nearly 0.4% and 0.6%, respectively, in the past 30 days, reflecting investors’ optimism.
Earnings Surprise History
Unum Group has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average beat being 18.61%.
Zacks Rank & Price Performance
The company currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 47.5%, outperforming the industry’s growth of 25%.
Image Source: Zacks Investment Research
Style Score
UNM has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and most promising momentum.
Business Tailwinds
Unum Group’s in-force block growth and higher overall sales have been driving premiums. In 2023, the company expects sales growth in the range of 8-12% and premium growth in the range of 3-5%.
UNM should continue to benefit from solid performance in Unum US and Colonial Life — the two largest operating segments of Unum Group. While disciplined sales trends, strong persistency in group lines and growth of new product lines like dental and vision should drive Unum US, improving premium income and favorable risk results should drive the Colonial Life segment.
The insurer estimates sales growth in the range of 8-12%, premium growth in the band of 4-6% and adjusted operating return on equity (ROE) in the range of 16-18% in 2023 at Unum US. At Colonial Life, sales growth is expected in the range of 8-12%, premium growth between 1% and 3% and adjusted operating ROE in the band of 20-22% in 2023.
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. Strong statutory earnings might provide an impetus to dividend capacity.
In its concerted efforts to enhance shareholders’ value, UNM increased dividends at a five-year CAGR of 7.5%. It also expects to increase share repurchase to $300 million in the second half of 2023 and projects the rate of earnings and dividends to grow in line with the GAAP earnings growth expectations (4-7%). In 2023, Unum Group targets dividends in the range of $250-$275 million. The company looks to repurchase shares worth $250 million in 2023.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, the insurer has gained 18.5%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.6% and 10.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Kinsale Capital beats estimates in each of the last four quarters, the average being 14.77%. In the past year, the insurer has rallied 59.5%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 2.4% and 4.1% north, respectively, in the past 30 days.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 42.7%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.
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Here's Why Hold Strategy is Apt for Unum Group (UNM) Now
Unum Group (UNM - Free Report) is well-poised for growth on the back of disciplined sales trends, strong persistency, an improving rate environment, favorable risk experience and solid capital.
Optimistic Growth Projections
The Zacks Consensus Estimate for Unum Group’s 2023 earnings is pegged at $7.49, indicating a 20.6% increase from the year-ago reported figure on 2.4% higher revenues of $12.30 billion. The consensus estimate for 2024 earnings is pegged at $7.81, indicating a 4.2% increase from the year-ago reported figure on 3.5% higher revenues of $12.74 billion.
The expected long-term earnings growth rate is 8.4%, which is higher than the industry average of 6.5%.
Northbound Estimate Revision
Estimates for 2023 and 2024 have moved up nearly 0.4% and 0.6%, respectively, in the past 30 days, reflecting investors’ optimism.
Earnings Surprise History
Unum Group has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, the average beat being 18.61%.
Zacks Rank & Price Performance
The company currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 47.5%, outperforming the industry’s growth of 25%.
Image Source: Zacks Investment Research
Style Score
UNM has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and most promising momentum.
Business Tailwinds
Unum Group’s in-force block growth and higher overall sales have been driving premiums. In 2023, the company expects sales growth in the range of 8-12% and premium growth in the range of 3-5%.
UNM should continue to benefit from solid performance in Unum US and Colonial Life — the two largest operating segments of Unum Group. While disciplined sales trends, strong persistency in group lines and growth of new product lines like dental and vision should drive Unum US, improving premium income and favorable risk results should drive the Colonial Life segment.
The insurer estimates sales growth in the range of 8-12%, premium growth in the band of 4-6% and adjusted operating return on equity (ROE) in the range of 16-18% in 2023 at Unum US. At Colonial Life, sales growth is expected in the range of 8-12%, premium growth between 1% and 3% and adjusted operating ROE in the band of 20-22% in 2023.
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. Strong statutory earnings might provide an impetus to dividend capacity.
In its concerted efforts to enhance shareholders’ value, UNM increased dividends at a five-year CAGR of 7.5%. It also expects to increase share repurchase to $300 million in the second half of 2023 and projects the rate of earnings and dividends to grow in line with the GAAP earnings growth expectations (4-7%). In 2023, Unum Group targets dividends in the range of $250-$275 million. The company looks to repurchase shares worth $250 million in 2023.
Stocks to Consider
Some better-ranked stocks from the insurance industry are RLI Corp. (RLI - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Root, Inc. (ROOT - Free Report) . While RLI Corp. and Kinsale Capital sport a Zacks Rank #1 (Strong Buy), Root carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, the insurer has gained 18.5%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.6% and 10.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Kinsale Capital beats estimates in each of the last four quarters, the average being 14.77%. In the past year, the insurer has rallied 59.5%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 2.4% and 4.1% north, respectively, in the past 30 days.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 42.7%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.