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Unum Group Stock Near 52-Week High: Is This Your Buy Signal?
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Shares of Unum Group (UNM - Free Report) closed at $54.36 on Monday, near its 52-week high of $58.17. This proximity underscores investor confidence. It has the ingredients for further price appreciation. Technical indicators for Unum Group show that the stock is trading above its 50-day and 200-day moving averages, signaling strong upward momentum.
Earnings of UNM grew 9% in the last five years, better than the industry average of 3.8%. The accident and health insurer has a solid surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average beat being 2.96%.
Shares of UNM have gained 20.2% in the year-to-date period compared with the industry’s growth of 29.2%. The stock has outperformed the Zacks S&P 500 composite’s growth 13.3%.
UNM YTD Price Performance
Image Source: Zacks Investment Research
Positive Analyst Sentiment Instills Confidence in UNM
10 of the 13 analysts covering the stock have raised estimates for 2024 while nine analysts have raised estimates for 2025 over the past 60 days. The Zacks Consensus Estimate for 2024 and 2025 increased 2.5% and 2.4%, respectively.
The consensus estimate for 2024 and 2025 earnings indicates an improvement of 10.4% and 5.3%, respectively.
Unum Group’s Return on Capital
Unum Group's return on invested capital (ROIC) in the trailing 12 months was 9.2%, better than the industry average of 7.7%. This reflects the company’s efficiency in utilizing funds to generate income.
Factors Benefiting UNM
Premiums, the primary component of UNM’s top line, continue to gain from its healthy in-force block growth and higher sales. Unum Group expects sales growth in the range of 7-10% and premium growth in the band of 5-7% in 2024. For the long term, it expects sales growth in the range of 8-12% and premium growth in the band of 4-7%.
UNM 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 5-7% in 2024 at Unum U.S. It expects sales growth in the range of 8-12% and premium growth in the band of 2-4% at Colonial Life for 2024.
UNM 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, and that places 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 3.1%, higher than the industry average of 1.9%, making it an attractive pick for yield-seeking investors. It estimates a 10-15% increase in dividend going forward.
UNM Shares Are Affordable
Unum Group is trading at a discount compared with the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-book ratio of 0.97X, lower than the industry average of 1.87X. Also, it has a Value Score of A.
Shares of another accident and health insurer, Employers Holdings Inc. (EIG - Free Report) , are also trading at a discount to the industry average.
However, shares of other players from the same space, like Aflac Incorporated (AFL - Free Report) and Trupanion, Inc. (TRUP - Free Report) , are trading at a premium compared with the industry’s average.
Wrapping Up
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. Coupled with favorable growth estimates and the affordability of the stock, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Unum Group Stock Near 52-Week High: Is This Your Buy Signal?
Shares of Unum Group (UNM - Free Report) closed at $54.36 on Monday, near its 52-week high of $58.17. This proximity underscores investor confidence. It has the ingredients for further price appreciation. Technical indicators for Unum Group show that the stock is trading above its 50-day and 200-day moving averages, signaling strong upward momentum.
Earnings of UNM grew 9% in the last five years, better than the industry average of 3.8%. The accident and health insurer has a solid surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average beat being 2.96%.
Shares of UNM have gained 20.2% in the year-to-date period compared with the industry’s growth of 29.2%. The stock has outperformed the Zacks S&P 500 composite’s growth 13.3%.
UNM YTD Price Performance
Image Source: Zacks Investment Research
Positive Analyst Sentiment Instills Confidence in UNM
10 of the 13 analysts covering the stock have raised estimates for 2024 while nine analysts have raised estimates for 2025 over the past 60 days. The Zacks Consensus Estimate for 2024 and 2025 increased 2.5% and 2.4%, respectively.
The consensus estimate for 2024 and 2025 earnings indicates an improvement of 10.4% and 5.3%, respectively.
Unum Group’s Return on Capital
Unum Group's return on invested capital (ROIC) in the trailing 12 months was 9.2%, better than the industry average of 7.7%. This reflects the company’s efficiency in utilizing funds to generate income.
Factors Benefiting UNM
Premiums, the primary component of UNM’s top line, continue to gain from its healthy in-force block growth and higher sales. Unum Group expects sales growth in the range of 7-10% and premium growth in the band of 5-7% in 2024. For the long term, it expects sales growth in the range of 8-12% and premium growth in the band of 4-7%.
UNM 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 5-7% in 2024 at Unum U.S. It expects sales growth in the range of 8-12% and premium growth in the band of 2-4% at Colonial Life for 2024.
UNM 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, and that places 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 3.1%, higher than the industry average of 1.9%, making it an attractive pick for yield-seeking investors. It estimates a 10-15% increase in dividend going forward.
UNM Shares Are Affordable
Unum Group is trading at a discount compared with the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-book ratio of 0.97X, lower than the industry average of 1.87X. Also, it has a Value Score of A.
Shares of another accident and health insurer, Employers Holdings Inc. (EIG - Free Report) , are also trading at a discount to the industry average.
However, shares of other players from the same space, like Aflac Incorporated (AFL - Free Report) and Trupanion, Inc. (TRUP - Free Report) , are trading at a premium compared with the industry’s average.
Wrapping Up
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. Coupled with favorable growth estimates and the affordability of the stock, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.