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UNM Stock Trading at a Discount to Industry at 1.23X: Time to Hold?
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Key Takeaways
For 2025, Unum U.S. expects sales growth of 5-10% and an adjusted operating ROE of 23-25%.
For 2025, Colonial Life projects 5-10% sales growth and 18-20% ROE.
Favorable sales trends, risk experience, persistency, and capital strength position UNM for long-term growth.
Unum Group (UNM - Free Report) shares are trading at a discount compared to the Zacks Accident and Health Insurance industry. Its forward price-to-book value of 1.23X is lower than the industry average of 1.82X, the Finance sector’s 4.16X and the Zacks S&P 500 Composite’s 8.1X. The insurer has a Value Score of A.
The insurer has a market capitalization of $13.93 billion. The average volume of shares traded in the last three months was 1.4 million. Shares of AMERISAFE, Inc. (AMSF - Free Report) , Globe Life Inc. (GL - Free Report) and Aflac Incorporated (AFL - Free Report) are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
UNM is an Outperformer
Shares of Unum Group have surged 63.5% in the past year, outperforming its industry and the Finance sector and the Zacks S&P 500 composite’s growth of 27.1%, 20.4% and 10.8%, respectively.
UNM vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
UNM Trading Above 50-Day and 200-Day Moving Averages
Shares of Unum Group closed at $79.25 on Thursday, near its 52-week high of $84.48. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $78.88 and $72.31, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
UNM Price Movement vs. 50- Day, 200-Day Moving Average
Image Source: Zacks Investment Research
UNM’s Growth Projection Encourages
The Zacks Consensus Estimate for Unum Group’s 2025 revenues is pegged at $13.24 billion, implying a year-over-year improvement of 2.7%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 9.1% and 3.3%, respectively, from the corresponding 2025 estimates.
Earnings have grown 12.9% in the past five years, better than the industry average of 5.5%. The expected long-term earnings growth rate is 7.2%, outperforming the industry average of 6%.
Average Target Price for UNM Suggests Upside
Based on short-term price targets offered by 14 analysts, the Zacks average price target is $92.43 per share. The average suggests a potential 17.5% upside from the last closing price.
Image Source: Zacks Investment Research
Bearish Analyst Sentiment on UNM
Three of the eight analysts covering the stock have lowered estimates for 2025, while two analysts have lowered the same for 2026 over the past 30 days.
The Zacks Consensus Estimate for 2025 earnings has moved down 0.3% in the past 30 days, while the same for 2026 has moved down 0.1% in the same time frame.
Image Source: Zacks Investment Research
Factors Impacting UNM
Premiums, the primary component of UNM’s top line, continue to gain from its healthy in-force block growth and higher sales. In 2025, Unum Group expects sales growth in the range of 5-10%, premium growth in the band of 4-7% and adjusted operating return on equity (ROE) between 21% and 23% from core business. The company estimates 8-12% growth in adjusted operating EPS in 2025. For the long term, it expects sales growth in the range of 8-12%, premium growth in the band of 4-7% and adjusted operating earnings per share growth between 8% and 12%.
Unum Group is poised to grow on the operational excellence of Unum U.S. and Colonial Life. Encouraging sales trends, strong persistency in group lines and growth of new product lines like dental and vision, coupled with favorable risk results, should benefit Unum U.S. and Colonial Life, the two largest operating segments.
Management estimates sales growth of 5-10% and premium growth of 3.6%, as well as adjusted operating ROE in the range of 23-25% in 2025, for Unum U.S. It expects sales growth in the range of 5-10%, premium growth in the band of 2-4% and adjusted operating ROE in the range of 18-20% for Colonial Life in 2025.
Unum Group enjoys a solid capital position and substantial statutory earnings and capital, leading to financial flexibility.
UNM’s Impressive Dividend History
Unum Group has consistently enhanced shareholders’ value through dividend hikes. The board has increased the shareholder dividend by 15%, effective in the third quarter of 2024, putting the dividend payout ratio right around 20%. It also marked the 15th dividend hike in the last 14 years. The dividend yield of the company was 2.12%, making it an attractive pick for yield-seeking investors.
Conclusion
Favorable sales trends and risk experience, strong persistency, an improving rate environment, solid capital position, higher return on capital and effective capital deployment should continue to favor UNM over the long term. The insurer should continue to gain from favorable growth estimates as well as the affordability of the stock. It is, therefore, wise to retain this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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UNM Stock Trading at a Discount to Industry at 1.23X: Time to Hold?
Key Takeaways
Unum Group (UNM - Free Report) shares are trading at a discount compared to the Zacks Accident and Health Insurance industry. Its forward price-to-book value of 1.23X is lower than the industry average of 1.82X, the Finance sector’s 4.16X and the Zacks S&P 500 Composite’s 8.1X. The insurer has a Value Score of A.
The insurer has a market capitalization of $13.93 billion. The average volume of shares traded in the last three months was 1.4 million.
Shares of AMERISAFE, Inc. (AMSF - Free Report) , Globe Life Inc. (GL - Free Report) and Aflac Incorporated (AFL - Free Report) are trading at a multiple higher than the industry average.
Image Source: Zacks Investment Research
UNM is an Outperformer
Shares of Unum Group have surged 63.5% in the past year, outperforming its industry and the Finance sector and the Zacks S&P 500 composite’s growth of 27.1%, 20.4% and 10.8%, respectively.
UNM vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
UNM Trading Above 50-Day and 200-Day Moving Averages
Shares of Unum Group closed at $79.25 on Thursday, near its 52-week high of $84.48. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $78.88 and $72.31, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
UNM Price Movement vs. 50- Day, 200-Day Moving Average
Image Source: Zacks Investment Research
UNM’s Growth Projection Encourages
The Zacks Consensus Estimate for Unum Group’s 2025 revenues is pegged at $13.24 billion, implying a year-over-year improvement of 2.7%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 9.1% and 3.3%, respectively, from the corresponding 2025 estimates.
Earnings have grown 12.9% in the past five years, better than the industry average of 5.5%. The expected long-term earnings growth rate is 7.2%, outperforming the industry average of 6%.
Average Target Price for UNM Suggests Upside
Based on short-term price targets offered by 14 analysts, the Zacks average price target is $92.43 per share. The average suggests a potential 17.5% upside from the last closing price.
Image Source: Zacks Investment Research
Bearish Analyst Sentiment on UNM
Three of the eight analysts covering the stock have lowered estimates for 2025, while two analysts have lowered the same for 2026 over the past 30 days.
The Zacks Consensus Estimate for 2025 earnings has moved down 0.3% in the past 30 days, while the same for 2026 has moved down 0.1% in the same time frame.
Image Source: Zacks Investment Research
Factors Impacting UNM
Premiums, the primary component of UNM’s top line, continue to gain from its healthy in-force block growth and higher sales. In 2025, Unum Group expects sales growth in the range of 5-10%, premium growth in the band of 4-7% and adjusted operating return on equity (ROE) between 21% and 23% from core business. The company estimates 8-12% growth in adjusted operating EPS in 2025. For the long term, it expects sales growth in the range of 8-12%, premium growth in the band of 4-7% and adjusted operating earnings per share growth between 8% and 12%.
Unum Group is poised to grow on the operational excellence of Unum U.S. and Colonial Life. Encouraging sales trends, strong persistency in group lines and growth of new product lines like dental and vision, coupled with favorable risk results, should benefit Unum U.S. and Colonial Life, the two largest operating segments.
Management estimates sales growth of 5-10% and premium growth of 3.6%, as well as adjusted operating ROE in the range of 23-25% in 2025, for Unum U.S. It expects sales growth in the range of 5-10%, premium growth in the band of 2-4% and adjusted operating ROE in the range of 18-20% for Colonial Life in 2025.
Unum Group enjoys a solid capital position and substantial statutory earnings and capital, leading to financial flexibility.
UNM’s Impressive Dividend History
Unum Group has consistently enhanced shareholders’ value through dividend hikes. The board has increased the shareholder dividend by 15%, effective in the third quarter of 2024, putting the dividend payout ratio right around 20%. It also marked the 15th dividend hike in the last 14 years. The dividend yield of the company was 2.12%, making it an attractive pick for yield-seeking investors.
Conclusion
Favorable sales trends and risk experience, strong persistency, an improving rate environment, solid capital position, higher return on capital and effective capital deployment should continue to favor UNM over the long term. The insurer should continue to gain from favorable growth estimates as well as the affordability of the stock. It is, therefore, wise to retain this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.