Back to top

Image: Bigstock

Is Unum Group (UNM) a Great Value Stock Right Now?

Read MoreHide Full Article

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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.

Unum Group (UNM - Free Report) is a stock many investors are watching right now. UNM is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 5.86. This compares to its industry's average Forward P/E of 10.19. 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 6.53.

Investors should also note that UNM holds a PEG ratio of 0.72. 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 industry has an average PEG of 1.77 right now. 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.

We should also highlight that UNM has a P/B ratio of 0.85. 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 1.46. Over the past 12 months, UNM's P/B has been as high as 1.06 and as low as 0.56, with a median of 0.83.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. 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 0.64. This compares to its industry's average P/S of 1.76.

Finally, investors will want to recognize that UNM has a P/CF ratio of 5.22. 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 6.73. Within the past 12 months, UNM's P/CF has been as high as 6.63 and as low as 4.67, with a median of 5.65.

Value investors will likely look at more than just these metrics, but the above data helps show that Unum Group is likely undervalued currently. And when considering the strength of its earnings outlook, UNM sticks out at as one of the market's strongest value stocks.


See More Zacks Research for These Tickers


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


Unum Group (UNM) - free report >>

Published in