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Unum Group (UNM)
NYSE:UNM
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Unum Group
(NYSE:UNM)75Outperform
Positive Factors
Earnings and Sales Performance
Despite the EPS miss, core sales and persistency were strong, leading to an above-consensus EPS guide for 2025.
Reinsurance Strategy
Unum announced a transaction to reinsure $3.4bn of statutory long-term care reserves with Fortitude Re, which is viewed as a positive step in management’s goal to de-risk the business.
Negative Factors
Earnings Miss
Unum Group's 4Q:24 operating EPS was below both analyst and consensus expectations.
Unum Group (UNM) vs. S&P 500 (SPY)
Market Cap
$13.77B
Dividend Yield2%
Average Volume (3M)1.26M
Price to Earnings (P/E)8.2
Beta (1Y)0.17
Revenue Growth4.03%
EPS Growth45.42%
CountryUS
Employees10,812
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)9.47
Shares Outstanding176,777,740
10 Day Avg. Volume1,590,793
30 Day Avg. Volume1,255,490
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)N/A
Price to Sales (P/S)1.12
Price to Cash Flow (P/CF)7.40
P/FCF Ratio6.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$92.00Price Target Upside18.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Unum Group Business Overview & Revenue Model
Company DescriptionUnum Group (UNM) is a leading provider of financial protection benefits in the United States, United Kingdom, and Poland. The company specializes in offering disability insurance, life insurance, employer- and employee-paid group benefits, and other related services. Unum Group operates through several subsidiaries, including Unum US, Unum UK, and Colonial Life, each focusing on specific insurance products and markets.
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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 12.89B | 12.39B | 11.99B | 12.01B | 13.16B | Gross Profit |
| 12.89B | 11.93B | 11.52B | 11.80B | 13.16B | EBIT |
| 0.00 | 1.93B | 1.82B | 820.10M | 739.80M | EBITDA |
| 0.00 | 1.94B | 2.05B | 1.57B | 1.27B | Net Income Common Stockholders |
| 1.78B | 1.28B | 1.41B | 981.00M | 793.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.40B | 146.00M | 1.51B | 1.46B | 1.67B | Total Assets |
| 15.65B | 63.26B | 61.43B | 70.12B | 70.63B | Total Debt |
| 3.74B | 3.43B | 3.43B | 3.44B | 3.35B | Net Debt |
| 3.74B | 3.28B | 3.31B | 3.37B | 3.15B | Total Liabilities |
| 4.69B | 53.60B | 52.24B | 3.90B | 3.76B | Stockholders Equity |
| 10.96B | 9.65B | 9.20B | 11.42B | 10.87B |
| Cash Flow | Free Cash Flow | |||
| 1.39B | 1.07B | 1.32B | 1.28B | 478.40M | Operating Cash Flow |
| 1.51B | 1.20B | 1.42B | 1.39B | 597.50M | Investing Cash Flow |
| -344.40M | -725.90M | -955.90M | -1.34B | -267.70M | Financing Cash Flow |
| -1.15B | -450.10M | -418.60M | -168.90M | -216.90M |
Unum Group Technical Analysis
Positive
77.91
Price Trends
74.82
Positive
71.76
Positive
62.32
Positive
Market Momentum
1.32
Negative
54.57
Neutral
66.70
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 77.91 is above the 20-day moving average (MA) of 76.67, above the 50-day MA of 74.82, and above the 200-day MA of 62.32, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 54.57 is Neutral, neither overbought nor oversold. The STOCH value of 66.70 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 29 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 0 New Risks
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 |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.77B | 8.24 | 16.23% | 2.00% | 4.03% | 45.42% | |
74 Outperform | $59.84B | 11.36 | 20.86% | 1.89% | 1.21% | 24.08% | |
67 Neutral | $6.11B | 1.95 | 39.61% | 4.75% | 47.95% | ― | |
66 Neutral | $4.05B | 10.74 | -695.35% | 1.51% | 7.47% | 55.84% | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $38.79B | 14.61 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
UNM
Unum Group
77.91
28.67
58.23%
AFL
AFLAC
107.60
27.12
33.70%
CNO
CNO Financial
40.16
13.86
52.70%
LNC
Lincoln National
35.88
10.59
41.87%
MET
Metlife
81.56
12.56
18.20%
PRU
Prudential Financial
109.59
4.75
4.53%
Unum Group Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 2.58% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance for Unum in 2024, with significant growth in earnings and effective capital management. However, challenges remain in certain product lines and market segments, such as voluntary benefits and Colonial Life sales. The outlook for 2025 is positive, with expectations of continued growth and strategic advancements.Highlights
Earnings and Revenue Growth
Unum Group delivered strong financial results in 2024, with earnings per share growing 10%, exceeding initial expectations of 7% to 9% growth. Core operations delivered over 20% ROE.
Capital Management Success
The company raised its dividend by 15% and repurchased approximately $1 billion of shares throughout 2024. Holding company cash ended at $2 billion and an RBC ratio of 430%.
No Additional LTC Capital Requirement
For the first time in many years, the Long-Term Care (LTC) business did not consume any capital, with expectations of not needing further capital contributions.
Continued Growth and Strategic Outlook for 2025
Unum expects earnings per share growth of 8% to 12% for 2025, with free cash flow generation projected between $1.3 billion and $1.6 billion.
Strong Operational Performance
Unum U.S. saw record absolute sales and growth of nearly 20% in Q4. Premium for core operations increased 3.6% in the quarter and finished up 5% for the year.
Lowlights
Volatility in Supplemental and Voluntary Lines
The voluntary benefits lines experienced pressure, particularly in Q4, attributed to unfavorable claims experience across multiple product lines.
Challenges in Colonial Life Sales
Colonial Life sales were down 1.4% for the full year, with some pressure in the large and jumbo market, which is viewed as opportunistic.
LTC Incidents Above Expected Levels
Long-Term Care incidents remained above long-term expected levels, contributing to an increase in the net premium ratio from 94.5% to 94.6%.
Company Guidance
During the Unum Group's fourth quarter 2024 earnings call, the company outlined a strong performance in 2024, exceeding initial expectations with a 10% growth in earnings per share compared to the anticipated 7% to 9%. Key metrics highlighted included a 20% return on equity (ROE) for core operations and a 15% dividend increase. The company repurchased around $1 billion worth of shares, which included over $700 million excluding one-time purchases. Looking ahead to 2025, Unum expects to generate between $1.3 billion and $1.6 billion in free cash flow and aims for an 8% to 12% growth in earnings per share. The company anticipates consolidated sales growth in the high single digits and premium growth in the range of 4% to 7%, maintaining good margins through disciplined underwriting. Unum also reported robust financial metrics, ending 2024 with $2 billion in holding company cash and a risk-based capital (RBC) ratio of 430%, while expecting to maintain RBC above 400% and holding company cash greater than $2 billion by the end of 2025.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.
Business Operations and StrategyFinancial Disclosures
Unum Group Reports Strong Q4 2024 Financial Results
Positive
Feb 4, 2025
Unum Group reported strong financial results for the fourth quarter of 2024, with net income of $348.7 million, reflecting an increase from the previous year. The company demonstrated robust growth across its core operations, with a solid balance sheet and liquidity, as well as a positive outlook for 2025, anticipating continued premium and earnings growth.
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.