Brief Commentary On Unum Group’s (NYSE:UNM) Fundamentals
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Unum Group (NYSE:UNM) due to its excellent fundamentals in more than one area. UNM is a financially-sound company with a an impressive track record of performance, trading at a discount. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Unum Group here.
Undervalued with solid track record and pays a dividend
Over the past year, UNM has grown its earnings by 9.16%, with its most recent figure exceeding its annual average over the past five years. Not only did UNM outperformed its past performance, its growth also exceeded the Insurance industry expansion, which generated a 3.77% earnings growth. This is an notable feat for the company. UNM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that UNM has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. UNM’s has produced operating cash levels of 0.39x total debt over the past year, which implies that UNM’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
UNM is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of UNM’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the insurance industry, UNM is also trading below its peers, relative to earnings generated. This bolsters the proposition that UNM’s price is currently discounted.
Next Steps:
For Unum Group, there are three essential factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for UNM’s future growth? Take a look at our free research report of analyst consensus for UNM’s outlook.
Dividend Income vs Capital Gains: Does UNM return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from UNM as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of UNM? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
