Unum Group (NYSE:UNM) Shares Gap Down on Disappointing Earnings

Key Points

• Unum Group shares gapped down significantly from $80.97 to $71.03 after reporting weaker than expected quarterly earnings, with EPS of $2.07 falling short of analysts' expectations of $2.23.
• The company announced a quarterly dividend increase from $0.42 to $0.46 per share, with an annualized yield of 2.50%, reinforcing investor confidence despite the recent earnings miss.
• Brokerage firms have set new price targets for Unum Group, with Barclays forecasting $96.00 and others providing a range of $85.00 to $102.00, indicating a generally optimistic outlook despite current market volatility.

Unum Group (NYSE:UNM - Get Free Report) shares gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $80.97, but opened at $71.03. Unum Group shares last traded at $72.92, with a volume of 1,515,734 shares changing hands.

The financial services provider reported $2.07 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $2.23 by ($0.16). Unum Group had a return on equity of 13.44% and a net margin of 11.77%. The firm had revenue of $3.36 billion during the quarter, compared to analysts' expectations of $3.35 billion. During the same period in the previous year, the firm earned $2.16 EPS. The firm's quarterly revenue was up 4.0% on a year-over-year basis.

Unum Group Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, August 15th. Shareholders of record on Friday, July 25th will be given a dividend of $0.46 per share. This represents a $1.84 annualized dividend and a dividend yield of 2.6%. The ex-dividend date is Friday, July 25th. This is an increase from Unum Group's previous quarterly dividend of $0.42. Unum Group's payout ratio is presently 22.01%.

Wall Street Analyst Weigh In

A number of equities analysts have issued reports on UNM shares. Morgan Stanley upped their target price on Unum Group from $83.00 to $85.00 and gave the company an "equal weight" rating in a research report on Monday, July 14th. Piper Sandler boosted their price target on Unum Group from $88.00 to $92.00 and gave the company an "overweight" rating in a research note on Thursday, July 3rd. Keefe, Bruyette & Woods reissued an "outperform" rating and issued a $95.00 target price (down from $100.00) on shares of Unum Group in a research note on Thursday. Barclays set a $96.00 price target on Unum Group and gave the company an "overweight" rating in a research report on Monday, July 7th. Finally, JPMorgan Chase & Co. increased their target price on Unum Group from $87.00 to $96.00 and gave the stock a "neutral" rating in a research note on Tuesday, July 8th. Five research analysts have rated the stock with a hold rating, eight have assigned a buy rating and one has issued a strong buy rating to the company's stock. According to MarketBeat.com, Unum Group presently has an average rating of "Moderate Buy" and an average price target of $91.62.

Insiders Place Their Bets

In related news, EVP Elizabeth Claire Ahmed sold 10,000 shares of the stock in a transaction dated Wednesday, May 7th. The shares were sold at an average price of $80.00, for a total transaction of $800,000.00. Following the completion of the transaction, the executive vice president directly owned 51,170 shares of the company's stock, valued at $4,093,600. This represents a 16.35% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this link. 0.92% of the stock is owned by insiders.

Institutional Trading of Unum Group

Several institutional investors have recently added to or reduced their stakes in the stock. Balyasny Asset Management L.P. bought a new position in Unum Group in the 4th quarter worth approximately $113,962,000. Zurich Insurance Group Ltd FI purchased a new stake in Unum Group in the 4th quarter worth approximately $105,199,000. Invesco Ltd. raised its holdings in shares of Unum Group by 155.6% during the 1st quarter. Invesco Ltd. now owns 2,278,473 shares of the financial services provider's stock valued at $185,604,000 after purchasing an additional 1,387,139 shares in the last quarter. Nuveen LLC bought a new position in shares of Unum Group during the 1st quarter worth about $93,287,000. Finally, Freestone Grove Partners LP acquired a new stake in shares of Unum Group during the 4th quarter valued at about $65,096,000. 86.57% of the stock is owned by institutional investors and hedge funds.

Unum Group Stock Performance

The stock has a market capitalization of $12.17 billion, a price-to-earnings ratio of 8.35, a price-to-earnings-growth ratio of 1.18 and a beta of 0.41. The company has a quick ratio of 0.30, a current ratio of 0.30 and a debt-to-equity ratio of 0.31. The stock's 50-day simple moving average is $79.91 and its 200 day simple moving average is $78.49.

Unum Group Company Profile

Unum Group, together with its subsidiaries, provides financial protection benefit solutions primarily in the United States, the United Kingdom, Poland, and internationally. It operates through Unum US, Unum International, Colonial Life, and Closed Block segment. The company offers group long-term and short-term disability, group life, and accidental death and dismemberment products; supplemental and voluntary products, such as individual disability, voluntary benefits, and dental and vision products; and accident, sickness, disability, life, and cancer and critical illness products.