Unum Group (UNM) versus Aflac (AFL) Critical Contrast
Unum Group (NYSE: UNM) and Aflac (NYSE:AFL) are both large-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.
This is a summary of current recommendations and price targets for Unum Group and Aflac, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Unum Group presently has a consensus price target of $50.22, suggesting a potential downside of 4.08%. Aflac has a consensus price target of $78.40, suggesting a potential downside of 7.02%. Given Unum Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Unum Group is more favorable than Aflac.
Valuation and Earnings
This table compares Unum Group and Aflac’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Unum Group||$11.19 billion||1.06||$1.66 billion||$4.15||12.62|
|Aflac||$22.65 billion||1.47||$4.75 billion||$6.63||12.72|
Aflac has higher revenue and earnings than Unum Group. Unum Group is trading at a lower price-to-earnings ratio than Aflac, indicating that it is currently the more affordable of the two stocks.
This table compares Unum Group and Aflac’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Unum Group has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, Aflac has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500.
Unum Group pays an annual dividend of $0.92 per share and has a dividend yield of 1.8%. Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.0%. Unum Group pays out 22.2% of its earnings in the form of a dividend. Aflac pays out 25.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Unum Group has increased its dividend for 8 consecutive years and Aflac has increased its dividend for 34 consecutive years. Aflac is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
92.2% of Unum Group shares are held by institutional investors. Comparatively, 65.6% of Aflac shares are held by institutional investors. 0.5% of Unum Group shares are held by insiders. Comparatively, 3.0% of Aflac shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Aflac beats Unum Group on 10 of the 16 factors compared between the two stocks.
Unum Group Company Profile
Unum Group 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. Its Closed Block segment consists of other insurance products.
Aflac Company Profile
Aflac Incorporated is a business holding company. The Company is involved in supplemental health and life insurance, which is marketed and administered through its subsidiary, American Family Life Assurance Company of Columbus (Aflac). The Company’s insurance business consists of two segments: Aflac Japan and Aflac U.S. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans.
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