Unum vs Aflac Which Should You Buy?

Unum Group and Aflac Incorporated are two major players in the insurance industry, particularly in the realm of supplemental insurance. Both companies provide a range of products and services to help individuals and businesses protect against financial risks. Investors interested in the insurance sector may be drawn to these stocks for their stability and potential for growth. However, there are differences in their business models, growth strategies, and financial performance that may influence investment decisions. Let's delve deeper into the detailed analysis of Unum vs Aflac stocks.

Unum or Aflac?

When comparing Unum and Aflac, 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 Unum and Aflac.

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. Unum has a dividend yield of 2.06%, while Aflac has a dividend yield of 1.92%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Unum reports a 5-year dividend growth of 7.57% year and a payout ratio of 16.67%. On the other hand, Aflac reports a 5-year dividend growth of 13.12% year and a payout ratio of 19.97%.

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 Unum P/E ratio at 8.28 and Aflac's P/E ratio at 11.11. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Unum P/B ratio is 1.34 while Aflac's P/B ratio is 2.32.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Unum has seen a 5-year revenue growth of 0.21%, while Aflac's is 0.14%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Unum's ROE at 16.71% and Aflac's ROE at 21.66%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $77.37 for Unum and $106.71 for Aflac. Over the past year, Unum's prices ranged from $48.38 to $83.96, with a yearly change of 73.54%. Aflac's prices fluctuated between $79.31 and $115.50, with a yearly change of 45.63%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.