Unum Group Valuation – February 2019 $UNM

Company Profile (excerpt from Reuters): Unum Group, incorporated on March 22, 1995, is a provider of financial protection benefits in the United States and the United Kingdom. The Company’s products include disability, life, accident, critical illness, dental and vision, and other related services. Its segments include Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Its Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Its Unum UK segment includes insurance for group long-term disability, group life, and supplemental lines of business, which include dental, individual disability and critical illness products. Its Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products issued primarily by Colonial Life & Accident Insurance Company and marketed to employees, on both a group and an individual basis, at the workplace through an independent contractor agency sales force and brokers. Its Closed Block segment consists of other insurance products. Its principal operating subsidiaries in the United States are Unum Life Insurance Company of America (Unum America), Provident Life and Accident Insurance Company (Provident), The Paul Revere Life Insurance Company (Paul Revere Life), and Colonial Life & Accident Insurance Company, and in the United Kingdom, Unum Limited.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of UNM – February 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,623,067,828 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 76.32% Pass
5. Moderate PEmg Ratio PEmg < 20 8.85 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.90 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.02
MG Growth Estimate 7.24%
MG Value $92.24
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $58.22
MG Value based on 0% Growth $34.13
Market Implied Growth Rate 0.17%
Current Price $35.53
% of Intrinsic Value 38.52%

Unum Group qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.71 in 2015 to an estimated $4.02 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.17% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Unum Group revealed the company was trading below its Graham Number of $68.83. The company pays a dividend of $0.98 per share, for a yield of 2.8%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 8.85, which was below the industry average of 32.96, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Unum Group fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $68.83
PEmg 8.85
PB Ratio 0.90
Dividend Yield 2.76%
TTM Dividend $0.98
Number of Consecutive Years of Dividend Growth 10

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $2,971,300,000
Total Assets $61,875,600,000
Intangible Assets $350,300,000
Total Liabilities $53,253,800,000
Shares Outstanding (Diluted Average) 217,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.24
Dec2018 $2.38
Dec2017 $4.37
Dec2016 $3.95
Dec2015 $3.50
Dec2014 $1.57
Dec2013 $3.19
Dec2012 $3.17
Dec2011 $0.94
Dec2010 $2.69
Dec2009 $2.57
Dec2008 $1.62
Dec2007 $1.91
Dec2006 $1.23
Dec2005 $1.64
Dec2004 -$0.86
Dec2003 -$1.31
Dec2002 $1.66
Dec2001 $2.21
Dec2000 $2.22
Dec1999 -$0.77

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.02
Dec2018 $3.32
Dec2017 $3.63
Dec2016 $3.20
Dec2015 $2.71
Dec2014 $2.31
Dec2013 $2.63
Dec2012 $2.30
Dec2011 $1.89
Dec2010 $2.24
Dec2009 $1.94
Dec2008 $1.46
Dec2007 $1.09
Dec2006 $0.61
Dec2005 $0.43
Dec2004 $0.14
Dec2003 $0.69

Recommended Reading:

Other ModernGraham posts about the company

5 Low P/E Companies In The S&P 500 – August 2018
Best Stocks Below Their Graham Number – August 2018
10 Low PE Stock Picks for the Defensive Investor – August 2018
Best Stocks Below Their Graham Number – June 2018
10 Low PE Stock Picks for the Defensive Investor – June 2018

Other ModernGraham posts about related companies

Everest Re Group Ltd Valuation – February 2019 $RE
Cigna Corp Valuation – January 2019 $CI
MetLife Inc Valuation – January 2019 $MET
Aflac Inc Valuation – January 2019 $AFL
Principal Financial Group Inc Valuation – January 2019 $PFG
Progressive Corp Valuation – January 2019 $PGR
Lincoln National Corp Valuation – January 2019 $LNC
Cincinnati Financial Corp Valuation – January 2019 $CINF
Aon PLC Valuation – November 2018 $AON
Travelers Companies Inc Valuation – November 2018 $TRV

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Unum Group Valuation – April 2018 $UNM

Company Profile (excerpt from Reuters): Unum Group, incorporated on March 22, 1995, is a provider of financial protection benefits in the United States and the United Kingdom. The Company’s products include disability, life, accident, critical illness, dental and vision, and other related services. Its segments include Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Its Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Its Unum UK segment includes insurance for group long-term disability, group life, and supplemental lines of business, which include dental, individual disability and critical illness products. Its Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products issued primarily by Colonial Life & Accident Insurance Company and marketed to employees, on both a group and an individual basis, at the workplace through an independent contractor agency sales force and brokers. Its Closed Block segment consists of other insurance products. Its principal operating subsidiaries in the United States are Unum Life Insurance Company of America (Unum America), Provident Life and Accident Insurance Company (Provident), The Paul Revere Life Insurance Company (Paul Revere Life), and Colonial Life & Accident Insurance Company, and in the United Kingdom, Unum Limited.

UNM Chart

UNM data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of UNM – April 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $10,609,475,092 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 114.95% Pass
5. Moderate PEmg Ratio PEmg < 20 11.39 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.13 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $4.21
MG Growth Estimate 12.29%
MG Value $139.27
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $61.05
MG Value based on 0% Growth $35.79
Market Implied Growth Rate 1.44%
Current Price $47.95
% of Intrinsic Value 34.43%

Unum Group qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.31 in 2014 to an estimated $4.21 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.44% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Unum Group revealed the company was trading below its Graham Number of $69.92. The company pays a dividend of $0.86 per share, for a yield of 1.8% Its PEmg (price over earnings per share – ModernGraham) was 11.39, which was below the industry average of 22.6, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Unum Group fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $69.92
PEmg 11.39
PB Ratio 1.13
Dividend Yield 1.79%
TTM Dividend $0.86
Number of Consecutive Years of Dividend Growth 9

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2017
Long-Term Debt & Capital Lease Obligation $2,742,900,000
Total Assets $64,013,100,000
Intangible Assets $338,600,000
Total Liabilities $54,438,200,000
Shares Outstanding (Diluted Average) 224,799,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.05
Dec2017 $4.37
Dec2016 $3.95
Dec2015 $3.50
Dec2014 $1.57
Dec2013 $3.19
Dec2012 $3.17
Dec2011 $0.94
Dec2010 $2.71
Dec2009 $2.57
Dec2008 $1.62
Dec2007 $1.91
Dec2006 $1.23
Dec2005 $1.64
Dec2004 -$0.86
Dec2003 -$1.31
Dec2002 $1.66
Dec2001 $2.21
Dec2000 $2.22
Dec1999 -$0.77
Dec1998 $2.54

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $4.21
Dec2017 $3.63
Dec2016 $3.20
Dec2015 $2.71
Dec2014 $2.31
Dec2013 $2.63
Dec2012 $2.30
Dec2011 $1.89
Dec2010 $2.25
Dec2009 $1.94
Dec2008 $1.46
Dec2007 $1.09
Dec2006 $0.61
Dec2005 $0.43
Dec2004 $0.14
Dec2003 $0.69
Dec2002 $1.65

Recommended Reading:

Other ModernGraham posts about the company

Best Stocks Below Their Graham Number – August 2016
10 Low PE Stock Picks for the Defensive Investor – August 2016
Stocks Trading Below Their Graham Number – July 2016
Benjamin Graham Would Love These 10 Companies Today
10 Low PE Stocks for the Defensive Investor – July 2016

Other ModernGraham posts about related companies

Brighthouse Financial Inc Valuation – Initial Coverage $BHF
XL Group Ltd Valuation – April 2018 $XL
Aetna Inc Valuation – April 2018 $AET
Everest Re Group Ltd Valuation – Initial Coverage $RE
Cigna Corp Valuation – March 2018 $CI
Aspen Insurance Holdings Ltd Valuation – March 2018 $AHL
AFLAC Inc Valuation – March 2018 $AFL
MetLife Inc Valuation – March 2018 $MET
Principal Financial Group Inc Valuation – March 2018 $PFG
Progressive Corp Valuation – February 2018 $PGR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Unum Group Valuation – August 2016 $UNM

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – August 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group is a provider of disability insurance products in the United States and the United Kingdom. The Company provides a portfolio of other insurance products, including employer and employee paid group benefits, life insurance and other related services. Its segments are Unum US, Unum UK, Colonial Life, Closed Block and Corporate. The Unum US segment includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. The Unum UK segment includes insurance for group long-term disability, group life, and supplemental lines of business, which include individual disability and critical illness products. The Colonial Life segment includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products. The Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products.

UNM Chart

UNM data by YCharts

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of UNM – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,481,764,612 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 15.74% Fail
5. Moderate PEmg Ratio PEmg < 20 13.98 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.92 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

UNM value chart August 2016

EPSmg $2.55
MG Growth Estimate 1.61%
MG Value $29.87
Opinion Overvalued
MG Grade B
MG Value based on 3% Growth $36.94
MG Value based on 0% Growth $21.65
Market Implied Growth Rate 2.74%
Current Price $35.61
% of Intrinsic Value 119.22%

Unum Group is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $2.3 in 2012 to an estimated $2.55 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 2.74% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Unum Group revealed the company was trading below its Graham Number of $41.77. The company pays a dividend of $0.74 per share, for a yield of 2.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 13.98, which was below the industry average of 16.56, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Unum Group performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

UNM charts August 2016

Graham Number $41.77
PEmg 13.98
PB Ratio 0.92
Dividend Yield 2.08%
TTM Dividend $0.74
Number of Consecutive Years of Dividend Growth 8

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Current Portion of Long-Term Debt $350,700,000
Total Assets $63,853,100,000
Intangible Assets $226,700,000
Total Liabilities $54,696,100,000
Shares Outstanding (Diluted Average) 237,319,000

Earnings Per Share History

Next Fiscal Year Estimate $1.99
Dec2015 $3.50
Dec2014 $1.57
Dec2013 $3.19
Dec2012 $3.17
Dec2011 $0.94
Dec2010 $2.71
Dec2009 $2.57
Dec2008 $1.62
Dec2007 $1.91
Dec2006 $1.23
Dec2005 $1.64
Dec2004 -$0.86
Dec2003 -$1.31
Dec2002 $1.66
Dec2001 $2.21
Dec2000 $2.22
Dec1999 -$0.77
Dec1998 $2.54
Dec1997 $2.57
Dec1996 $1.61

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.55
Dec2015 $2.71
Dec2014 $2.31
Dec2013 $2.63
Dec2012 $2.30
Dec2011 $1.89
Dec2010 $2.25
Dec2009 $1.94
Dec2008 $1.46
Dec2007 $1.09
Dec2006 $0.61
Dec2005 $0.43
Dec2004 $0.14
Dec2003 $0.69
Dec2002 $1.65
Dec2001 $1.68
Dec2000 $1.49

Recommended Reading:

Other ModernGraham posts about the company

10 Low PE Stocks for the Defensive Investor – May 2016
Stocks Trading Below Their Graham Number – May 2016
Unum Group Valuation – March 2016 $UNM
Stocks Trading Below Their Graham Number – March 2016
Stocks Trading Below Their Graham Number – February 2016

Other ModernGraham posts about related companies

Assurant Inc Valuation – August 2016 $AIZ
American International Group Inc Valuation – August 2016 $AIG
Humana Inc Valuation – August 2016 $HUM
Chubb Limited Valuation – August 2016 $CB
Torchmark Corporation Valuation – August 2016 $TMK
Anthem Inc Valuation – August 2016 $ANTM
American Financial Group Inc Valuation – August 2016 $AFG
AFLAC Inc Valuation – August 2016 $AFL
Hartford Financial Services Group Inc Valuation – August 2016 $HIG
MetLife Inc Valuation – August 2016 $MET

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Unum Group Valuation – March 2016 $UNM

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – February 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group is a provider of disability insurance products in the United States and the United Kingdom. The Company’s business segments: Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Unum US includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Unum UK includes insurance for group long-term disability, group life and lines of business, which include individual disability and critical illness products. Colonial Life includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products to employees. The Company’s Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products no longer actively marketed. Its Corporate segment includes investment income on corporate assets not specifically allocated to a line of business.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of UNM

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,777,493,162 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 44.59% Pass
5. Moderate PEmg Ratio PEmg < 20 10.31 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.92 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

UNM value chart March 2016

EPSmg $3.13
MG Growth Estimate 5.44%
MG Value $60.73
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $45.44
MG Value based on 0% Growth $26.64
Market Implied Growth Rate 0.91%
Current Price $32.32
% of Intrinsic Value 53.22%

Unum Group qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position. The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $2.3 in 2012 to an estimated $3.13 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.91% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

Unum Group performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

UNM charts March 2016

Graham Number $55.08
PEmg 10.31
PB Ratio 0.92
Dividend Yield 2.17%
Number of Consecutive Years of Dividend Growth 8

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Dec2015
Long-Term Debt $2,475,100,000
Total Assets $60,589,700,000
Intangible Assets $230,900,000
Total Liabilities $51,925,800,000
Shares Outstanding (Diluted Average) 247,855,000

Earnings Per Share History

Next Fiscal Year Estimate $3.75
Dec2015 $3.50
Dec2014 $1.57
Dec2013 $3.19
Dec2012 $3.17
Dec2011 $0.94
Dec2010 $2.71
Dec2009 $2.57
Dec2008 $1.62
Dec2007 $1.91
Dec2006 $1.23
Dec2005 $1.64
Dec2004 -$0.86
Dec2003 -$1.31
Dec2002 $1.66
Dec2001 $2.24
Dec2000 $2.24
Dec1999 -$0.77
Dec1998 $2.54
Dec1997 $2.57
Dec1996 $1.61

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.13
Dec2015 $2.71
Dec2014 $2.31
Dec2013 $2.63
Dec2012 $2.30
Dec2011 $1.89
Dec2010 $2.25
Dec2009 $1.94
Dec2008 $1.46
Dec2007 $1.09
Dec2006 $0.61
Dec2005 $0.43
Dec2004 $0.15
Dec2003 $0.70
Dec2002 $1.67
Dec2001 $1.70
Dec2000 $1.50

Recommended Reading:

Other ModernGraham posts about the company

Stocks Trading Below Their Graham Number – March 2016
Unum Group Valuation – November 2015 Update $UNM
The Best Companies of the Insurance Industry – October 2015
10 Low PE Stocks for the Defensive Investor – August 2015
The 20 Best Stocks For Value Investors This Week – 8/15/15

Other ModernGraham posts about related companies

Principal Financial Group Inc Valuation – March 2016 $PFG
Assurant Inc Valuation – February 2016 $AIZ
American International Group Inc Stock Valuation – February 2016 $AIG
Chubb Ltd Stock Valuation – February 2016 $CB
Prudential Financial Inc Valuation – February 2016 $PRU
Anthem Inc Valuation – February 2016 $ANTM
Aflac Inc Valuation – February 2016 $AFL
MetLife Inc Valuation – February 2016 Update $MET
Aetna Inc Valuation – February 2016 Update $AET
Marsh & McLennan Company Valuation – January 2016 Update $MMC

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Unum Group Valuation – November 2015 Update $UNM

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – October 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group is a provider of disability insurance products in the United States and the United Kingdom. The Company’s business segments: Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Unum US includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Unum UK includes insurance for group long-term disability, group life and lines of business, which include individual disability and critical illness products. Colonial Life includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products to employees. The Company’s Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products no longer actively marketed. Its Corporate segment includes investment income on corporate assets not specifically allocated to a line of business.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of UNM – November 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $8,939,416,133 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 74.58% Pass
5. Moderate PEmg Ratio PEmg < 20 13.44 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.05 Pass
Score
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

UNM value Chart November 2015

EPSmg $2.72
MG Growth Estimate 6.53%
MG Value $58.58
Opinion Undervalued
MG Value based on 3% Growth $39.40
MG Value based on 0% Growth $23.10
Market Implied Growth Rate 2.47%
Current Price $36.51
% of Intrinsic Value 62.33%

Unum Group qualifies for either the Enterprising Investor or the more conservative Defensive Investor.  In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial condition.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.89 in 2011 to an estimated $2.72 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.47% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Unum Group (UNM)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

UNM Charts November 2015

Graham Number $52.46
PEmg 13.44
PB Ratio 1.05
Dividend Yield 1.86%
Number of Consecutive Years of Dividend Growth 7

 

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Long-Term Debt $2,217,100,000
Total Assets $61,503,800,000
Intangible Assets $232,100,000
Total Liabilities $52,922,700,000
Shares Outstanding (Diluted Average) 246,324,000

Earnings Per Share History

Next Fiscal Year Estimate $3.47
Dec14 $1.61
Dec13 $3.23
Dec12 $3.17
Dec11 $0.94
Dec10 $2.71
Dec09 $2.57
Dec08 $1.62
Dec07 $1.91
Dec06 $1.23
Dec05 $1.64
Dec04 -$0.86
Dec03 -$1.31
Dec02 $1.66
Dec01 $2.24
Dec00 $2.24
Dec99 -$0.77
Dec98 $2.54
Dec97 $2.57
Dec96 $1.61
Dec95 $1.92

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.72
Dec14 $2.34
Dec13 $2.64
Dec12 $2.30
Dec11 $1.89
Dec10 $2.25
Dec09 $1.94
Dec08 $1.46
Dec07 $1.09
Dec06 $0.61
Dec05 $0.43
Dec04 $0.15
Dec03 $0.70
Dec02 $1.67
Dec01 $1.70
Dec00 $1.50
Dec99 $1.28

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Insurance Industry – October 2015
10 Low PE Stocks for the Defensive Investor – August 2015
The 20 Best Stocks For Value Investors This Week – 8/15/15
Unum Group Analysis – August 2015 Update $UNM
The Best Companies of the Insurance Industry – June 2015

Other ModernGraham posts about related companies

Assurant Inc. Valuation – November 2015 Update $AIZ
American International Group Inc. Valuation – November 2015 Update $AIG
Cincinnati Financial Corp Valuation – November 2015 Update $CINF
American Financial Group Inc. Valuation – November 2015 Update $AFG
Loews Corporation Valuation – November 2015 Update $L
Allstate Corporation Valuation – October 2015 Update $ALL
Humana Inc. Valuation – October 2015 Update $HUM
Torchmark Corporation Valuation – October 2015 Update $TMK
MetLife Inc. Valuation – October 2015 Update $MET
Aetna Inc. Valuation – October 2015 Update $AET

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Unum Group Analysis – August 2015 Update $UNM

In the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group is a provider of disability insurance products in the United States and the United Kingdom. The Company’s business segments: Unum US, Unum UK, Colonial Life, Closed Block and Corporate. Unum US includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Unum UK includes insurance for group long-term disability, group life and lines of business, which include individual disability and critical illness products. Colonial Life includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products to employees. The Company’s Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products no longer actively marketed. Its Corporate segment includes investment income on corporate assets not specifically allocated to a line of business.
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To read the rest of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference.
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Downloadable PDF version of this valuation:

ModernGraham Valuation of UNM – August 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor
1. Adequate Size of the Enterprise Market Cap > $2Bil Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end Pass
5. Moderate PEmg Ratio PEmg < 20 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 Pass
Score
Enterprising Investor
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg 2.73
MG Growth Estimate 6.63%
MG Value $59.44
Opinion Undervalued
MG Value based on 3% Growth $39.59
MG Value based on 0% Growth $23.21
Market Implied Growth Rate 2.29%
Current Price $35.71
% of Intrinsic Value 60.08%

Unum Group qualifies for both the Defensive Investor and the Enterprising Investor, as the company passes all of the requirements of both investor types.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the next stage of the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.89 in 2011 to an estimated $2.73 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.29% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Unum Group (UNM)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

UNM charts August 2015

 

PEmg 13.08
PB Ratio 1.04
Dividend Yield 1.85%
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Long-Term Debt $2,580,800,000
Total Assets $61,706,800,000
Intangible Assets $198,800,000
Total Liabilities $53,191,100,000
Shares Outstanding (Diluted Average) 249,192,000

Earnings Per Share History

Next Fiscal Year Estimate $3.51
Dec14 $1.61
Dec13 $3.23
Dec12 $3.17
Dec11 $0.94
Dec10 $2.71
Dec09 $2.57
Dec08 $1.62
Dec07 $1.91
Dec06 $1.23
Dec05 $1.64
Dec04 -$0.86
Dec03 -$1.31
Dec02 $1.66
Dec01 $2.24
Dec00 $2.24
Dec99 -$0.77
Dec98 $2.54
Dec97 $2.57
Dec96 $1.61
Dec95 $1.92

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.73
Dec14 $2.34
Dec13 $2.64
Dec12 $2.30
Dec11 $1.89
Dec10 $2.25
Dec09 $1.94
Dec08 $1.46
Dec07 $1.09
Dec06 $0.61
Dec05 $0.43
Dec04 $0.15
Dec03 $0.70
Dec02 $1.67
Dec01 $1.70
Dec00 $1.50
Dec99 $1.28

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

[/level-mg-stocks-screens-subscriber]

Unum Group Quarterly Valuation – May 2015 $UNM

Unum-logoIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group, is a provider of disability insurance products in the United States and the United Kingdom. The Company offers group, individual, and voluntary benefits, either as stand-alone products or combined with other coverages. The Company has three principal operating business segments: Unum US, Unum UK, and Colonial Life. Unum US, includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Unum UK, includes insurance for group long-term disability, group life, and lines of business which include individual disability and critical illness products. Colonial Life, includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products to employees, on group and individual basis.

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $34.65
MG Value $59.87
MG Opinion Undervalued
Value Based on 3% Growth $39.69
Value Based on 0% Growth $23.27
Market Implied Growth Rate 2.08%
PEmg 12.66
PB Ratio 1.01

Balance Sheet – March 2015

Total Debt $2,603,000,000
Total Assets $63,015,000,000
Intangible Assets $198,000,000
Total Liabilities $54,327,000,000
Outstanding Shares 252,200,000

Earnings Per Share

2015 (estimate) $3.53
2014 $1.61
2013 $3.23
2012 $3.17
2011 $0.94
2010 $2.71
2009 $2.57
2008 $1.62
2007 $1.91
2006 $1.23
2005 $1.64

Earnings Per Share – ModernGraham 

2015 (estimate) $2.74
2014 $2.34
2013 $2.64
2012 $2.30
2011 $1.89
2010 $2.25

Dividend History

Conclusion

Unum Group qualifies for both the Defensive Investor and the Enterprising Investor.  The company passes all of the requirements of both investor types, a rare accomplishment.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $1.89 in 2011 to an estimated $2.74 for 2015.  This level of demonstrated growth outpaces the market’s implied estimate of 2.08% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Unum Group (UNM)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Unum Group Quarterly Valuation – February 2015 $UNM

Unum-logoIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group, is a provider of disability insurance products in the United States and the United Kingdom. The Company offers group, individual, and voluntary benefits, either as stand-alone products or combined with other coverages. The Company has three principal operating business segments: Unum US, Unum UK, and Colonial Life. Unum US, includes group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. Unum UK, includes insurance for group long-term disability, group life, and lines of business which include individual disability and critical illness products. Colonial Life, includes insurance for accident, sickness, and disability products, life products, and cancer and critical illness products to employees, on group and individual basis.

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $34.76
MG Value $22.10
MG Opinion Overvalued
Value Based on 3% Growth $33.71
Value Based on 0% Growth $19.76
Market Implied Growth Rate 3.23%
PEmg 14.95
PB Ratio 219.26

Balance Sheet – December 2014

Total Debt $2,629,000,000
Total Assets $62,497,000,000
Intangible Assets $199,000,000
Total Liabilities $53,945,000,000
Outstanding Shares 53,945,000,000

Earnings Per Share

2014 $1.57
2013 $3.23
2012 $3.17
2011 $0.94
2010 $2.71
2009 $2.57
2008 $1.62
2007 $1.91
2006 $1.23
2005 $1.64
2004 -$0.65

Earnings Per Share – ModernGraham 

2014 $2.32
2013 $2.64
2012 $2.30
2011 $1.89
2010 $2.25
2009 $1.94

Dividend History

Conclusion:

Unum Group is suitable for both the Defensive Investor and the Enterprising Investor.  The company passes all of the initial requirements of both investor types, indicating the company is in a very strong financial position.  As a result, value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $2.25 in 2010 to $2.32 for 2014.  This level of demonstrated growth does not support the market’s implied estimate of 3.23% annual earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value below the market price.

Be sure to check out previous ModernGraham valuations of Unum Group (UNM) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Unum Group (UNM)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Unum Group (UNM) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Unum Group Quarterly Valuation – November 2014 $UNM

Unum-logoIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group is a provider of disability insurance products in the United States and the United Kingdom. The Company also provides a portfolio of other insurance products, including employer- and employee-paid group benefits, life insurance, and other related services. The Company operates in five segments: Unum US, Unum UK, Colonial Life, Closed Block and Corporate. The principal operating subsidiaries in the United States are Unum Life Insurance Company of America (Unum America), Provident Life and Accident Insurance Company (Provident), The Paul Revere Life Insurance Company (Paul Revere Life), and Colonial Life & Accident Insurance Company, and in the United Kingdom, Unum Limited.

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $33.60
MG Value $53.48
MG Opinion Undervalued
Value Based on 3% Growth $42.99
Value Based on 0% Growth $25.20
Market Implied Growth Rate 1.42%
PEmg 11.33
PB Ratio 0.93

Balance Sheet – September 2014

Total Debt $2,783,000,000
Total Assets $61,961,000,000
Intangible Assets $201,000,000
Total Liabilities $52,717,000,000
Outstanding Shares 254,800,000

Earnings Per Share

2014 (estimate) $3.49
2013 $3.23
2012 $3.17
2011 $0.94
2010 $2.71
2009 $2.57
2008 $1.62
2007 $1.91
2006 $1.23
2005 $1.64
2004 -$0.65

Earnings Per Share – ModernGraham 

2014 (estimate) $2.96
2013 $2.64
2012 $2.30
2011 $1.89
2010 $2.25
2009 $1.94

Dividend History

Conclusion:

Unum Group is suitable for both the Defensive Investor and the Enterprising Investor, having passed all of the requirements of both investor types.  As a result, value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $2.25 in 2010 to an estimated $2.96 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 1.42% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of Unum Group (UNM) for better perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Unum Group (UNM)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Unum Group (UNM) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Unum Group Inc. Quarterly Valuation – August 2014 $UNM

Unum-logoIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to widdle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Unum Group (UNM) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Unum Group is a provider of disability insurance products in the United States and the United Kingdom. The Company also provides a portfolio of other insurance products, including employer- and employee-paid group benefits, life insurance, and other related services. The Company operates in five segments: Unum US, Unum UK, Colonial Life, Closed Block and Corporate. The principal operating subsidiaries in the United States are Unum Life Insurance Company of America (Unum America), Provident Life and Accident Insurance Company (Provident), The Paul Revere Life Insurance Company (Paul Revere Life), and Colonial Life & Accident Insurance Company, and in the United Kingdom, Unum Limited.

UNM Chart

UNM data by YCharts

Defensive Investor – must pass all 6 of the following tests: Score = 6/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – PASS
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $34.22
MG Value $55.20
MG Opinion Undervalued
Value Based on 3% Growth $43.36
Value Based on 0% Growth $25.42
Market Implied Growth Rate 1.47%
PEmg 11.44
PB Ratio 0.94

Balance Sheet – 6/30/2014

Total Debt $2,792,000,000
Total Assets $62,218,100,000
Intangible Assets $201,300,000
Total Liabilities $52,974,400,000
Outstanding Shares 254,750,000

Earnings Per Share

2014 (estimate) $3.56
2013 $3.32
2012 $3.17
2011 $0.78
2010 $2.71
2009 $2.57
2008 $1.62
2007 $1.89
2006 $1.21
2005 $0.64
2004 -$0.65

Earnings Per Share – ModernGraham 

2014 (estimate) $2.99
2013 $2.64
2012 $2.26
2011 $1.84
2010 $2.25
2009 $1.87

Dividend History

UNM Dividend Chart

UNM Dividend data by YCharts

Conclusion:

Unum Group qualifies for either the Defensive Investor or the Enterprising Investor after passing all of the requirements of each investor type.  As a result, value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities including a review of ModernGraham’s valuation of Aflac Inc. (AFL).  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from $2.25 in 2010 to only an estimated $2.99 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 1.47% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out the previous ModernGraham valuations of Unum Group Inc. (UNM) for more perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Unum Group Inc. (UNM)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Unum Group Inc. (UNM) or any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

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