Head-To-Head Review: Unum Group (NYSE:UNM) & Employers (NYSE:EIG)

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Employers and Unum Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Employers	0	1	1	0	2.50
Unum Group	0	4	9	1	2.79

Employers currently has a consensus price target of $58.00, suggesting a potential upside of 23.12%. Unum Group has a consensus price target of $88.29, suggesting a potential upside of 9.32%. Given Employers’ higher possible upside, equities research analysts plainly believe Employers is more favorable than Unum Group.

Institutional & Insider Ownership

80.5% of Employers shares are owned by institutional investors. Comparatively, 86.6% of Unum Group shares are owned by institutional investors. 1.5% of Employers shares are owned by insiders. Comparatively, 0.9% of Unum Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Employers and Unum Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Employers	$880.70 million	1.29	$118.60 million	$4.12	11.43
Unum Group	$12.89 billion	1.09	$1.78 billion	$8.49	9.51

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

Profitability

This table compares Employers and Unum Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Employers	11.99%	9.21%	2.75%
Unum Group	12.31%	14.17%	2.46%

Dividends

Employers pays an annual dividend of $1.28 per share and has a dividend yield of 2.7%. Unum Group pays an annual dividend of $1.68 per share and has a dividend yield of 2.1%. Employers pays out 31.1% of its earnings in the form of a dividend. Unum Group pays out 19.8% 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. Employers has raised its dividend for 4 consecutive years and Unum Group has raised its dividend for 16 consecutive years.

Volatility & Risk

Employers has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Unum Group has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500.

Summary

Unum Group beats Employers on 11 of the 18 factors compared between the two stocks.

About Employers

Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. The company operates in two segments, Employers and Cerity. It offers workers’ compensation insurance to small businesses in low to medium hazard industries under the Employers and Cerity brands. The company markets its products through local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Henderson, Nevada.

About Unum Group

Unum Group, together with its subsidiaries, provides financial protection benefit solutions primarily in the United States, the United Kingdom, Poland, and internationally. It operates through Unum US, Unum International, Colonial Life, and Closed Block segment. The company offers group long-term and short-term disability, group life, and accidental death and dismemberment products; supplemental and voluntary products, such as individual disability, voluntary benefits, and dental and vision products; and accident, sickness, disability, life, and cancer and critical illness products. It also provides group pension, individual life and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous products. The company sells its products primarily to employers for the benefit of employees. It sells its products through field sales personnel, independent brokers, consultants, and independent contractor agent sales force and brokers. Unum Group was founded in 1848 and is based in Chattanooga, Tennessee.