Financial Comparison: Aflac (AFL) and Unum Group (UNM)
Aflac (NYSE: AFL) and Unum Group (NYSE:UNM) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, dividends, valuation and analyst recommendations.
Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.0%. Unum Group pays an annual dividend of $0.92 per share and has a dividend yield of 1.8%. Aflac pays out 25.9% of its earnings in the form of a dividend. Unum Group pays out 22.2% 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. Aflac has increased its dividend for 8 consecutive years and Unum Group has increased its dividend for 34 consecutive years.
Institutional & Insider Ownership
65.6% of Aflac shares are owned by institutional investors. Comparatively, 92.3% of Unum Group shares are owned by institutional investors. 3.0% of Aflac shares are owned by company insiders. Comparatively, 0.5% of Unum Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Earnings and Valuation
This table compares Aflac and Unum Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Aflac||$22.65 billion||1.47||$4.75 billion||$6.63||12.67|
|Unum Group||$11.19 billion||1.05||$1.66 billion||$4.15||12.52|
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 is a breakdown of recent ratings for Aflac and Unum Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Aflac presently has a consensus price target of $77.33, indicating a potential downside of 7.95%. Unum Group has a consensus price target of $50.50, indicating a potential downside of 2.83%. Given Unum Group’s stronger consensus rating and higher probable upside, analysts plainly believe Unum Group is more favorable than Aflac.
This table compares Aflac and Unum Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk and Volatility
Aflac has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Unum Group has a beta of 1.59, suggesting that its share price is 59% more volatile than the S&P 500.
Aflac beats Unum Group on 9 of the 16 factors compared between the two stocks.
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.
About Unum Group
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.
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