Unum: A Slow Burn (With Potential)

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Right, let’s talk Unum. Not exactly a name that sets pulses racing, is it? It’s insurance. Health, disability, the stuff people avoid thinking about until, well, they absolutely have to. And honestly, that’s fine. Predictable is good. Especially in this market. The stock’s been doing okay-ish – a solid 180% over five years, which, let’s be real, is more than double what the S&P 500 managed. But recently? A bit of a wobble. A dip. And that, my friends, is where things get… interesting.

They had their earnings call. It wasn’t pretty. Management admitted things weren’t exactly hitting the mark. The stock reacted accordingly – down about 6% year-to-date. Look, I’ve seen worse. Much worse. But it does mean there’s a potential entry point. A little bruised, a little overlooked. And I’m always drawn to the slightly battered. It’s a character thing, I suppose. So, here’s the breakdown. Three things need to happen for Unum to actually move. And I’m not talking fireworks; I’m talking consistent, slow-and-steady appreciation. The kind that doesn’t keep you up at night.

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1. The Buyback Band-Aid

Okay, so Unum says they’re planning to return 100% of their free cash flow to shareholders through buybacks and dividends. Sounds good, right? It’s basically financial window dressing. They’re saying, “Look, we’re confident enough to give you your money back.” It’s a bit like offering a plaster for a broken leg, but hey, it’s the thought that counts. A steady stream of buybacks does create demand, which is… helpful. It props up the price, even when everyone else is panicking. Plus, fewer shares floating around means a little boost to earnings per share. It’s not magic, but it’s… something.

2. Premium Growth: The 7% Sweet Spot

Premiums are the lifeblood, obviously. Last year, they managed 4.4% growth. Fine. The year before? 4.5%. Predictable. They’re hoping for 4-7% this year. I’m looking for above 7%. That’s when analysts start getting twitchy, revising their ratings, and suddenly everyone’s scrambling to get in. It’s a herd mentality, really. And I, for one, am happy to let the herd do the heavy lifting. It’s just… easier.

3. Margins: Stop the Bleeding

Right, the margins. They took a bit of a hit last year. Disability benefit ratios crept up. Apparently, people aren’t dying as quickly, and fewer are leaving claims. Which, on the one hand, is lovely. On the other hand, it’s bad for business. Management is saying it’ll stabilize in the 62-64% range. I’m hoping they can deliver. If they can get those margins sorted, it’ll support their projected EPS growth of 8-12%. It’s not going to make them the next tech unicorn, but it’s… responsible. And frankly, I’m craving a little responsibility right now.

So, is it worth the risk?

Look, Unum isn’t going to give you overnight riches. It’s not a meme stock. It’s a slow burn. But if they can consistently deliver on buybacks, premium growth, and margin stabilization, it could be a decent little earner. A solid, unglamorous, quietly profitable earner. And sometimes, that’s exactly what you need. It won’t be a wild ride, but honestly? I’m a bit tired of wild rides. I’m looking for something… steady. Something that won’t give me a heart attack before breakfast. Is that too much to ask?

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2026-02-18 18:22