Unumprovident (UNM) is a leading provider of workplace benefits and insurance solutions. In May 2025, the board approved a 10% increase in its quarterly dividend, moving the payout from $0.42 to $0.46 per share, marking the 17th consecutive year of dividend growth. The previous annual dividend rate of $1.68 now rises to $1.84, and the new dividend yield stands at 2.1%.

UNM shares have increased by 11.2% in the year to date and 55.3% over the past 52 weeks. With a market capitalization of $14.3 billion, a forward price-earnings ratio of 8.9x, and a PEG ratio of 1.25x, its valuation remains attractive relative to its insurance peers.

Unum Group’s recent 10% dividend increase signals confidence in its financial footing and future prospects. Does this bold move set Unum apart as a smart buy in today’s evolving market? Let’s find out.

Unum’s first quarter 2025 results, released April 29, offered a detailed look at its financial strength. The company reported net income of $189.1 million, or $1.06 per diluted share, and after-tax adjusted operating income of $365.5 million, or $2.04 per share. Premium income grew by 4.2% on a constant currency basis, reflecting strong core operations and stable margins. 

The balance sheet remains robust, with $2.2 billion in holding company liquidity and a risk-based capital ratio of approximately 460%, well above regulatory targets. Book value per common share climbed 19.5% year-over-year to $63.78. 

What’s Fueling Unum’s Momentum

Unum’s momentum in 2025 is anchored by major strategic moves. In February, the company finalized a $3.4 billion long-term care reinsurance deal with Fortitude Re, a Carlyle Group subsidiary. This transaction shifted a significant portion of Unum’s legacy long-term care insurance liabilities off its books, directly reducing exposure to future claims volatility and boosting capital reserves. The deal is a clear step toward improving Unum’s risk profile and freeing up resources for higher-return business lines.

Also in February, Unum’s board approved a $1 billion stock buyback program. This allows the company to repurchase up to 7.4% of its outstanding shares, a move that signals management’s confidence in Unum’s valuation and financial stability. The buyback adds another layer to Unum’s capital return strategy, complementing its recent 10% dividend hike.

Analyst Perspectives on UNM

The analyst outlook for Unum Group in 2025 is a mix of cautious optimism and recognition of the company’s steady fundamentals. For the upcoming quarter ending June 2025, the average earnings estimate sits at $2.25 per share, up from $2.16 in the prior year, reflecting a projected year-over-year growth rate of 4.17%. 

However, for the full fiscal year, analysts expect earnings of $8.95 per share, which is down from $9.57 last year, a decrease of 6.48%. Despite this dip, Unum’s management is guiding for a 6% to 10% increase in after-tax adjusted operating income per share for the full year, signaling confidence in ongoing operational strength.

This outlook is echoed in analyst sentiment. The 15 analysts surveyed have given Unum a consensus “Moderate Buy” rating, with a mean price target of $92.21. That target implies upside of roughly 14%, a notable cushion for investors weighing the stock’s recent dividend hike. 

Conclusion

So, is Unum a buy after its latest dividend hike? 

For income and growth investors alike, the answer may be yes. With 17 straight years of payout increases, 14% upside to analysts’ consensus price target, and a forward P/E under 10x, Unum checks all the boxes for a dividend growth stock with room to run. The combination of buybacks, strategic reinsurance deals, and digital investments positions shares for continued momentum. 

While short-term volatility is possible, the trend points higher as Unum’s capital moves and steady growth attract more attention.