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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Unum in Focus
Unum (UNM - Free Report) is headquartered in Chattanooga, and is in the Finance sector. The stock has seen a price change of 27.13% since the start of the year. Currently paying a dividend of $0.42 per share, the company has a dividend yield of 2.92%. In comparison, the Insurance - Accident and Health industry's yield is 1.85%, while the S&P 500's yield is 1.56%.
In terms of dividend growth, the company's current annualized dividend of $1.68 is up 20.9% from last year. Unum has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.37%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Unum's payout ratio is 18%, which means it paid out 18% of its trailing 12-month EPS as dividend.
UNM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $8.48 per share, with earnings expected to increase 10.70% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, UNM is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Unum (UNM) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Unum in Focus
Unum (UNM - Free Report) is headquartered in Chattanooga, and is in the Finance sector. The stock has seen a price change of 27.13% since the start of the year. Currently paying a dividend of $0.42 per share, the company has a dividend yield of 2.92%. In comparison, the Insurance - Accident and Health industry's yield is 1.85%, while the S&P 500's yield is 1.56%.
In terms of dividend growth, the company's current annualized dividend of $1.68 is up 20.9% from last year. Unum has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.37%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Unum's payout ratio is 18%, which means it paid out 18% of its trailing 12-month EPS as dividend.
UNM is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $8.48 per share, with earnings expected to increase 10.70% from the year ago period.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, UNM is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).