Why I'm Investing In UNUM Group (UNM)

Why UNM Deserves a Closer Look 

UNM is significantly undervalued on nearly every metric. With a P/E at 9.37, EV/EBIT below 8, and a free cash flow yield above 10%, the stock trades at a steep discount to both its historical averages and peers such as MetLife and Prudential. Our base case suggests 30 to 40 percent upside, even under conservative assumptions. In a bear case, downside appears limited thanks to strong cash generation and consistent share buybacks. 

Unum’s moat is durable. Persistency rates above 90 percent, particularly in long-term disability, point to deep client integration. Platforms like Total Leave, HR Connect, and Unum360 increase switching costs by embedding Unum into client HR systems. The company’s regulatory experience and underwriting expertise add competitive depth that cannot be easily replicated. 

Growth is steady and predictable. Management targets mid-single-digit premium growth, with operating leverage expected in group disability and supplemental lines. Digital investments are improving efficiency and retention. Restructuring of its long-term care block and flexible capital deployment could provide additional upside. 

The company is managed with discipline. Leadership has avoided flashy acquisitions, continued de-risking legacy liabilities, and returned over $200 million to shareholders in Q1 alone. The dividend was raised 10 percent in 2025, supported by $2.2 billion in holding company liquidity and a robust 460 percent RBC ratio. 

This is a stock built for resilience. With low market correlation and a conservative balance sheet, Unum is positioned to weather downturns while rewarding patient shareholders. For long-term investors seeking quality at a discount, this may be one of the few insurance names worth owning for a decade or more. 

Download the full report here: https://www.thevalueinvestor.co.uk/about-5-2