Unum Group (NYSE: UNM) and Aflac (NYSE:AFL) are both large-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, dividends and valuation.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Unum Group and Aflac, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Unum Group 2 6 2 0 2.00
Aflac 3 6 2 0 1.91

Unum Group currently has a consensus price target of $50.50, suggesting a potential downside of 4.55%. Given Unum Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Unum Group is more favorable than Aflac.

Volatility and Risk

Unum Group has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Aflac has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Valuation & Earnings

This table compares Unum Group and Aflac’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Unum Group $11,046.50 1.07 $931.40 $4.26 12.42
Aflac $22,559.00 1.47 $2,659.00 $6.90 12.23

Aflac has higher revenue and earnings than Unum Group. Aflac is trading at a lower price-to-earnings ratio than Unum Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

93.3% of Unum Group shares are owned by institutional investors. Comparatively, 65.8% of Aflac shares are owned by institutional investors. 0.5% of Unum Group shares are owned by company insiders. Comparatively, 3.0% of Aflac shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Unum Group pays an annual dividend of $0.92 per share and has a dividend yield of 1.7%. Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.0%. Unum Group pays out 21.6% of its earnings in the form of a dividend. Aflac pays out 24.9% 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 raised its dividend for 8 consecutive years and Aflac has raised its dividend for 34 consecutive years. Aflac is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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
Unum Group 8.67% 10.37% 1.52%
Aflac 12.49% 12.87% 2.03%

Summary

Aflac beats Unum Group on 11 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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