Aflac vs Unum Which Outperforms?

Aflac and Unum are two well-known insurance companies that specialize in providing supplemental health and disability insurance products. Both companies have a long history of serving customers and have established themselves as leaders in the industry. Aflac is known for its iconic duck mascot and strong brand recognition, while Unum is recognized for its wide range of insurance products and services. Investors looking to add insurance stocks to their portfolios may consider comparing the performance and potential of Aflac and Unum stocks.

Aflac or Unum?

When comparing Aflac and Unum, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Aflac and Unum.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Aflac has a dividend yield of 1.35%, while Unum has a dividend yield of 2.72%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Aflac reports a 5-year dividend growth of 5.26% year and a payout ratio of 27.72%. On the other hand, Unum reports a 5-year dividend growth of 7.24% year and a payout ratio of 16.51%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Aflac P/E ratio at 16.30 and Unum's P/E ratio at 7.75. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Aflac P/B ratio is 2.50 while Unum's P/B ratio is 1.25.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Aflac has seen a 5-year revenue growth of 0.11%, while Unum's is 0.19%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Aflac's ROE at 15.81% and Unum's ROE at 17.06%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $108.87 for Aflac and $72.46 for Unum. Over the past year, Aflac's prices ranged from $75.08 to $115.50, with a yearly change of 53.84%. Unum's prices fluctuated between $41.97 and $73.24, with a yearly change of 74.51%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.