An In-depth Look at the Dividend Performance and Sustainability of Unum Group (UNM, Financial)
Unum Group (UNM) recently announced a dividend of $0.37 per share, payable on 2023-11-17, with the ex-dividend date set for 2023-10-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Unum Group's dividend performance and assess its sustainability.
What Does Unum Group Do?
Unum Group is a provider of group and individual income protection insurance products in the United States, the United Kingdom, Poland, and other countries. It is the largest domestic disability insurer, with the majority of premiums generated from employer plans. The company also offers a complementary portfolio of other insurance products, including long-term care insurance, life insurance, and employer- and employee-paid group benefits. It has the following operating business segments: Unum US, Unum International, and Colonial Life. The majority of the revenue is earned from the Unum US segment. The firm markets its products primarily through brokers.
A Glimpse at Unum Group's Dividend History
Unum Group has maintained a consistent dividend payment record since 1987. Dividends are currently distributed on a quarterly basis. Unum Group has increased its dividend each year since 2004. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 19 years.
Breaking Down Unum Group's Dividend Yield and Growth
As of today, Unum Group currently has a 12-month trailing dividend yield of 2.78% and a 12-month forward dividend yield of 3.01%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Unum Group's annual dividend growth rate was 4.90%. Extended to a five-year horizon, this rate increased to 7.40% per year. And over the past decade, Unum Group's annual dividends per share growth rate stands at an impressive 10.40%.
Based on Unum Group's dividend yield and five-year growth rate, the 5-year yield on cost of Unum Group stock as of today is approximately 3.97%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Unum Group's dividend payout ratio is 0.18.
Unum Group's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Unum Group's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Unum Group's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Unum Group's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Unum Group's revenue has increased by approximately 0.90% per year on average, a rate that underperforms than approximately 63.82% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Unum Group's earnings increased by approximately 7.40% per year on average, a rate that underperforms than approximately 43.32% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 9.80%, which underperforms than approximately 36.46% of global competitors.
Concluding Remarks
Unum Group's consistent dividend payments, coupled with a strong growth rate and a healthy payout ratio, make it an attractive choice for income-focused investors. The company's profitability and growth metrics indicate a solid financial foundation and potential for future growth. However, investors should be mindful of the company's relative underperformance in revenue and earnings growth compared to its global competitors. Overall, Unum Group presents a compelling case for dividend sustainability and growth, making it a stock worth considering for portfolio diversification.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
