How Smart Investors Look at Unum (UNM)

Now trading at a price of $41.28, Unum has moved -4.7% so far today. In contrast, the S&P 500 index moved 1.3%. Read below for a basic value analysis of Unum.

Unum shares moved 67.6% over the last 52 weeks, with a high of $46.64 and a low of $25.77. During this time, the stock outperformed the S&P 500 index by 75.6%. As of January 2022, the company's 50-day average price is $41.0. Unum Group, together with its subsidiaries, provides financial protection benefit solutions primarily in the United States, the United Kingdom, and Poland. The mid-cap Financial Services company has 10,100 full time employees and is based in Chattanooga, TN. Unum has returned a 2.9% dividend yield over the last 12 months.

The Company Has Positive Cash Flows and Low Leverage:

2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $11,999 $13,162 $11,853
Revenue Growth n/a 9.69% -9.95%
Net Margins 9.17% 6.02% 6.95%
Net Margins Growth n/a -34.35% 15.45%
Earnings Per Share $5.24 $3.89 $4.02
EPS Growth n/a -25.76% 3.34%
Free Cash Flow (MM) $1,591 $478 $1,277
FCF Growth n/a -69.93% 166.97%
Capital Expenditures (MM) -$151 -$119 -$110
LT Debt to Equity 0.29 0.31 0.3

Unum Is Undervalued at Today's Prices:

Compared to the Financial Services sector's average of 13.34, Unum has a trailing twelve month P/E ratio of 7.0 and, according to its EPS guidance of 6.77, an expected P/E ratio of 6.1. Unum's PEG ratio is 0.47 based on its 15.0% annual average growth rate of historical and projected earnings per share. This suggests that company's shares are undervalued.

Furthermore, Unum is likely undervalued in terms of its equity because its P/B ratio is 0.9 compared to its sector average of 1.95. The company's shares are currently trading -36.9% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 3-year average EPS * book value per share) = √(22.5 * 4.38 * 43.488) = $65.47

Unum Is the Subject of Mixed Market Indicators:

13 analysts are following Unum and have set target prices ranging from $41 to $52 per share. On average, they have given the company a rating of hold. At the current price of $41.28, UNM is trading -10.55% away from its average analyst target price of $46.15 per share, implying an analyst consensus of some upside potential for the stock.

The company has an average amount of shares sold short since 2.7% of the company's shares are tied to short positions. Institutions own 88.9% of Unum's shares, while the insider ownership rate stands at 0.77%. The biggest shareholder is Blackrock Inc. with a 12% stake in the company worth approximately $950,053,062.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.