Canada markets close in 4 hours 58 minutes
  • S&P/TSX

    21,094.87
    -31.03 (-0.15%)
     
  • S&P 500

    4,634.61
    +39.99 (+0.87%)
     
  • DOW

    34,969.13
    +69.79 (+0.20%)
     
  • CAD/USD

    0.7817
    -0.0003 (-0.04%)
     
  • CRUDE OIL

    70.59
    +2.44 (+3.58%)
     
  • BTC-CAD

    73,100.91
    +3,167.52 (+4.53%)
     
  • CMC Crypto 200

    1,431.55
    +2.61 (+0.18%)
     
  • GOLD FUTURES

    1,788.80
    +0.70 (+0.04%)
     
  • RUSSELL 2000

    2,236.17
    -9.77 (-0.43%)
     
  • 10-Yr Bond

    1.5280
    +0.0460 (+3.10%)
     
  • NASDAQ

    15,687.01
    +195.35 (+1.26%)
     
  • VOLATILITY

    25.06
    -3.56 (-12.44%)
     
  • FTSE

    7,120.62
    +76.59 (+1.09%)
     
  • NIKKEI 225

    28,283.92
    -467.70 (-1.63%)
     
  • CAD/EUR

    0.6936
    +0.0031 (+0.45%)
     

Unum Group (UNM) Offers 4.125% $600 Million Senior Notes

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Unum Group UNM has completed an offering of $600 million senior notes. The notes carry an interest rate of 4.125% and are scheduled to mature on 2051.

The company plans to deploy the net proceeds to redeem 4.500% senior notes due 2025. These noted will be redeemed in June 2021. The remaining amount would be utilized for general corporate purposes include working capital requirements and strategic investments.

Given a sustained low interest rate environment, companies across sectors are issuing senior notes to procure funds and enhance financial flexibility without affecting liquidity. Recently, Assurant AIZ issued 2.650% $350 million Senior Notes due 2032 to capitalize on the low-rate environment.

By capitalizing on the low interest rate environment, Unum Group is also attempting to reduce its interest burden, thus facilitating margin expansion. Interest and debt expenses declined 2.8% year over year in the first quarter of 2021. Also, the company’s operational strength should enable it to service debt uninterruptedly, thereby maintaining the stock’s creditworthiness.

Unum Group’s debt level has been increasing in the past few years. As of Mar 31, 2021, the company’s long-term debt was $3.3 billion, up 0.02% from the 2020-end level. Total debt/total capital ratio of 24 was higher than 23.5 at fourth-quarter end. On the other hand, as of Mar 31, 2021, Unum Group’s cash and bank deposits increased nearly three-fold from the 2020 end level.

Recently, AM Best reiterated the Long-Term Issuer Credit Ratings (Long-Term ICR) of "bbb" (Good) and the Long-Term Issue Credit Ratings (Long-Term IR) while upgrading the outlook to stable from negative, reflecting a strong balance sheet, sustained solid operating performance, favorable business mix and prudent enterprise risk management.

Shares of this Zacks Rank #3 (Hold) accident and health insurer have rallied 31.6% year to date, outperforming the industry’s increase of 22.4%. Disciplined sales trends, strong persistency, conservative pricing and favorable benefit experience driving operating results across majority of its insurance entities should help it retain the momentum.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the space are Aflac AFL and Employers Holdings EIG, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aflac delivered 27.50% earnings surprise in the last reported quarter.

Employers Holdings delivered 15.91% earnings surprise in the last reported quarter.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

Free: See Our Top Stock and 4 Runners Up >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Aflac Incorporated (AFL) : Free Stock Analysis Report

Assurant, Inc. (AIZ) : Free Stock Analysis Report

Unum Group (UNM) : Free Stock Analysis Report

Employers Holdings Inc (EIG) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting