Dividend Stocks: Top Insurer Collects On Earnings, Raises Dividend

In IBD’s Dividend Leaders screen, insurance firm Unum Group (UNM) is in focus after a giant earnings beat, dividend increase and improving fundamentals.

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Unum Group — headquartered in Chattanooga, Tenn. — is an insurance provider specializing in disability, life and group insurance plans. The company serves 39 million people worldwide, primarily in the U.S. and United Kingdom.

A dividend yield of 3.2% is enough to pass the screen as a top dividend stock, more than double the 1.5% yield of the S&P 500. Unum Group recently announced another increase for its quarterly dividend, which is now at 33 cents a share. This should come as no surprise because the company has had a long track record of dividend growth, increasing its dividend every year since 2008.

Dividend Stock Surges On Big Earnings Beat

Reporting its second-quarter earnings after the close on Tuesday, shares surged 14.6% Wednesday on the impressive results. The stock regained its 50-day moving average.

Earnings came in at $1.91 a share — a massive beat from the analyst estimates of $1.22. Revenue of $3.04 billion was also above estimates of $2.99 billion. Unum Group increased its full-year outlook: Adjusted operating income per share is now expected to grow 40%-45% year-over-year vs. the 15%-20% previously forecast.

For the full year, analysts expect EPS to increase to $5.16 from $4.35 reported in 2021. While this is solid growth, it is still below the $5.44 reported in 2019 before the start of the pandemic.

There are certainly better stocks for a conservative dividend investor. Nevertheless, after this earnings beat, which followed another massive beat in the first quarter, growth is back on the radar.

This makes Unum Group an interesting dividend stock to follow for investors seeking a growing yield while also looking to take advantage of quickly improving fundamentals.

Shares of Unum Group are forming a cup base with a 37.59 buy point.

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