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Unum Group (UNM)
NYSE:UNM
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Unum Group
(NYSE:UNM)
Rating:76Outperform
Price Target:―
Positive Factors
Capital Management
High levels of excess capital and significant cash flow generation support potential upside to long-term share repurchases.
Earnings Guidance
Unum Group sees 2025 EPS growth of 8-12%, which is above analyst and consensus estimates.
Risk Management
Unum's recent long-term care deal gives confidence that the company can further derisk its insurance block.
Negative Factors
Earnings Forecast
Lower premium income reduces EPS forecasts, with EPS falling 2.3% in 2025 while FY26E-27 virtually unchanged.
Earnings Performance
UNM shares traded down owing to the earnings miss and weaker disability results in the quarter.
Premium Growth
UNM lowered its 2025 EPS growth outlook to 6-10% and lowered its core premium growth expectation to 3-6%.
Unum Group (UNM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.33B
Dividend Yield2.05%
Average Volume (3M)1.36M
Price to Earnings (P/E)9.7
Beta (1Y)0.36
Revenue Growth1.69%
EPS Growth25.54%
CountryUS
Employees10,833
SectorFinancial
Sector Strength82
IndustryInsurance - Life
Share Statistics
EPS (TTM)2.04
Shares Outstanding174,361,910
10 Day Avg. Volume1,041,885
30 Day Avg. Volume1,359,908
Financial Highlights & Ratios
PEG Ratio-0.87
Price to Book (P/B)1.41
Price to Sales (P/S)0.00
P/FCF Ratio9.78
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue0.34
Enterprise Value/Gross Profit1.40
Enterprise Value/Ebitda1.93
Forecast
1Y Price Target
$95.00Price Target Upside18.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Unum Group Business Overview & Revenue Model
Company DescriptionUnum Group, together with its subsidiaries, provides financial protection benefit solutions primarily in the United States, the United Kingdom, and Poland. It operates through Unum US, Unum International, Colonial Life, and Closed Block segments. The company offers group long-term and short-term disability, group life, and accidental death and dismemberment products; supplemental and voluntary products, such as individual disability, voluntary benefits, and dental and vision products; and accident, sickness, disability, life, and cancer and critical illness products. It also provides group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other products. The company sells its products primarily to employers for the benefit of employees. Unum Group sells its products through field sales personnel, independent brokers, consultants, and independent contractor agency sales force. The company was founded in 1848 and is based in Chattanooga, Tennessee.
How the Company Makes MoneyUnum Group generates revenue primarily through the sale of insurance products and the collection of insurance premiums. The company's key revenue streams include individual disability insurance, group disability insurance, life insurance, and supplemental health products. Unum also earns money through investment income from managing and investing policyholder premiums. Significant partnerships with employers and brokers help expand their distribution network, facilitating access to a larger customer base and enhancing premium collections. Additionally, Unum's financial performance is influenced by its underwriting practices, claims management, and risk assessment strategies, which ensure profitability by balancing premium income with potential payouts.
Unum Group Financial Statement Overview
Summary
Unum Group's financial health reflects strong revenue growth and improved profitability, supported by a robust cash flow position. The company's leverage situation is favorable, though asset management requires attention. Overall, Unum exhibits a solid financial foundation with promising operational efficiency.Income Statement
Unum Group has demonstrated consistent revenue growth, with a notable increase from $12.39 billion in 2023 to $12.89 billion in 2024. The net profit margin improved significantly, reflecting strong operational efficiency. However, the absence of EBIT and EBITDA figures for 2024 limits a complete profitability assessment.76
Positive
Balance Sheet
The company's debt-to-equity ratio improved, indicating a favorable leverage position with a decrease in total debt relative to equity. The equity ratio remains strong, ensuring stability. Nonetheless, a substantial drop in total assets from 2023 to 2024 raises some concerns about asset management.70
Positive
Cash Flow
The cash flow position is robust, with a significant increase in free cash flow from $1.07 billion in 2023 to $1.39 billion in 2024. This growth underscores strong operational cash generation capabilities. The operating cash flow to net income ratio remains healthy, indicating efficient conversion of earnings into cash.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 12.73B | 12.79B | 12.39B | 11.99B | 12.01B | 13.16B | Gross Profit |
| 12.50B | 12.79B | 11.93B | 11.52B | 11.80B | 13.16B | EBIT |
| 2.09B | 2.54B | 1.93B | 1.82B | 820.10M | 739.80M | EBITDA |
| 2.21B | 2.45B | 1.94B | 2.05B | 1.57B | 1.27B | Net Income Common Stockholders |
| 1.57B | 1.78B | 1.28B | 1.41B | 981.00M | 793.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 38.13B | 1.40B | 146.00M | 1.51B | 1.46B | 1.67B | Total Assets |
| 53.64B | 15.65B | 63.26B | 61.43B | 70.12B | 70.63B | Total Debt |
| 3.43B | 3.74B | 3.43B | 3.43B | 3.44B | 3.35B | Net Debt |
| 3.15B | 3.58B | 3.28B | 3.31B | 3.37B | 3.15B | Total Liabilities |
| 43.42B | 51.00B | 53.60B | 52.24B | 3.90B | 3.76B | Stockholders Equity |
| 10.22B | 10.96B | 9.65B | 9.20B | 11.42B | 10.87B |
| Cash Flow | Free Cash Flow | ||||
| 1.44B | 1.39B | 1.07B | 1.32B | 1.28B | 478.40M | Operating Cash Flow |
| 1.57B | 1.51B | 1.20B | 1.42B | 1.39B | 597.50M | Investing Cash Flow |
| -374.20M | -344.40M | -725.90M | -955.90M | -1.34B | -267.70M | Financing Cash Flow |
| -1.24B | -1.15B | -450.10M | -418.60M | -168.90M | -216.90M |
Unum Group Technical Analysis
Positive
80.30
Price Trends
78.73
Positive
76.96
Positive
69.65
Positive
Market Momentum
1.02
Negative
52.83
Neutral
70.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UNM, the sentiment is Positive. The current price of 80.3 is above the 20-day moving average (MA) of 79.93, above the 50-day MA of 78.73, and above the 200-day MA of 69.65, indicating a bullish trend. The MACD of 1.02 indicates Negative momentum. The RSI at 52.83 is Neutral, neither overbought nor oversold. The STOCH value of 70.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UNM.
Unum Group Risk Analysis
Unum Group disclosed 30 risk factors in its most recent earnings report. Unum Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
In addition to interest rate risk as previously discussed, we are exposed to other risks related to our investment portfolio which may adversely affect our results of operations, financial condition, or liquidity. Default Risk Q4, 2024
2.
Our use of artificial intelligence technology, as well as changes in artificial intelligence laws and regulations, could lead to regulatory noncompliance, operational risk, and competitive challenges. Q4, 2024
3.
We provide a broad array of disability, long-term care, group life, and voluntary insurance products that are affected by many factors, and changes in any of those factors may adversely affect our results of operations, financial condition, or liquidity. Q4, 2024
Unum Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $14.33B | 9.69 | 14.68% | 2.05% | 1.69% | 25.54% | |
75 Outperform | $9.15B | 18.80 | 23.87% | 1.29% | 10.18% | -9.75% | |
74 Outperform | $10.09B | 9.94 | 20.47% | 0.81% | 5.41% | 16.60% | |
70 Outperform | $4.36B | 8.75 | 12.72% | 2.66% | -1.72% | 95.91% | |
64 Neutral | $5.85B | 4.87 | 16.91% | 5.25% | 8.31% | -2.30% | |
64 Neutral | $12.78B | 9.87 | 7.67% | 17015.06% | 12.34% | -5.99% | |
59 Neutral | $3.84B | 13.54 | 12.47% | 1.63% | -0.43% | -16.22% |
* Financial Sector Average
Performance Comparison
UNM
Unum Group
80.30
28.71
55.65%
CNO
CNO Financial
37.78
9.80
35.03%
LNC
Lincoln National
32.62
2.54
8.44%
PRI
Primerica
272.08
44.56
19.59%
GL
Globe Life
120.20
35.40
41.75%
FG
F&G Annuities & Life Inc
31.98
-8.92
-21.81%
Unum Group Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 1.34%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a well-balanced performance with strong capital positioning, significant achievements in long-term care risk reduction, and robust sales in key segments. However, increased disability claims and lower persistency in some areas posed challenges. Despite these, the company remains confident in meeting its full-year growth outlook.Q1-2025 Updates
Positive Updates
Strong Capital Position
Unum ended the quarter with record levels of holding company liquidity at $2.2 billion and an RBC position of 460%, providing high levels of optionality for capital deployment.
Long-Term Care Reinsurance Transactions
Successfully announced two long-term care transactions removing 20% of the risk of the block at favorable economic terms, releasing significant capital.
Positive Premium Growth
Core operations achieved a premium growth rate of over 4%, with sales in the Unum U.S. segment slightly increasing by approximately 1% year-over-year.
Voluntary Benefits Sales Surge
Strong voluntary benefits sales growth reported, contributing to achieving sales goals for 2025, with significant increases across all segments.
Robust International Performance
Premium income for Unum International increased by 7% year-over-year, including 18% growth in Unum Poland.
Negative Updates
Increased Disability Claims
Earnings per share were impacted by a higher level of disability claims, particularly in the group disability line, with an increased benefit ratio.
Decline in International Segment Sales
The international segment saw a large decline, particularly affected by a lack of large case sales.
Lower Persistency in Some Product Lines
Persistency in some product lines was lower than last year's high, impacting overall sales.
Alternative Asset Portfolio Challenges
Lower returns in the alternative asset portfolio backing the long-term care block affected headline results.
Company Guidance
During Unum Group's Q1 2025 earnings call, the company reaffirmed its full-year growth outlook of 6% to 10%, citing strong performance across its core operations. Key metrics highlighted include a return on equity (ROE) of over 20%, over 4% premium growth, and $350 million in underlying statutory earnings. Additionally, the company reported an elevated group disability benefit ratio of 61.8% due to higher disability claims, but remains confident in achieving an annual benefit ratio expectation in the low 60s. The first quarter earnings per share (EPS) was $2.04, slightly below expectations due to these claims. Unum also noted robust capital metrics, with record holding company liquidity at $2.2 billion and a risk-based capital (RBC) ratio of 460%. The company executed $200 million in share repurchases during the quarter and plans to increase this in the second quarter. Despite some variability in international sales, Unum U.S. and Colonial Life segments showed growth, with voluntary benefits sales particularly strong. The company continues to focus on digital interactions to strengthen client relationships and anticipates further sales growth, aided by a healthy sales pipeline and strategic investments in technology.Unum Group Corporate Events
M&A TransactionsBusiness Operations and Strategy
Unum Group Enters Agreement with Fortitude Reinsurance
Neutral
Feb 27, 2025
On February 26, 2025, Unum Life Insurance Company of America, a subsidiary of Unum Group, entered into a Master Transaction Agreement with Fortitude Reinsurance Company Ltd. to reinsure a portion of its closed block individual long-term care business and individual disability business. This transaction, effective January 1, 2025, involves ceding $3.4 billion of long-term care reserves and $120 million of in-force premium to Fortitude Re, with an expected capital benefit of $100 million for Unum. The move is part of Unum’s strategy to reduce exposure to legacy long-term care business and focus on higher-returning core businesses, while continuing to provide service and administration for the reinsured business. The transaction is anticipated to close in 2025, subject to regulatory approvals and customary conditions.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.