UBS on U.S. Life Insurance: Trading Places - Sell StanCorp Financial (SFG) and Buy Unum Group (UNM)
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Price: $43.49 -0.3%
Rating Summary:
0 Buy, 7 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Rating Summary:
0 Buy, 7 Hold, 4 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 13
Trade SFG Now!
UBS on U.S. Life Insurance: Trading Places - StanCorp Financial (NYSE: SFG) and Unum Group (NYSE: UNM)
Analyst, Suneet Kamath, said, "We are initiating on UNM at Buy and on SFG at Sell. We argue that UNM ROE will expand toward 12% over the next 5 years, while SFG’s ROE will likely be closer to 9%. SFG trades at premiums of 29% on P/B and 64% on P/E to UNM, despite a lower ROE and our view that it has greater EPS risk to low interest rates."
Other highlighed points include: 1) Greater interest rate sensitivity and EPS risk at SFG, UNM better equipped to weather low rate environment; and 2) UNM has greater capital flexibility and positions for accretive buybacks.
UNM's price target $26, SFG's $29.
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Analyst, Suneet Kamath, said, "We are initiating on UNM at Buy and on SFG at Sell. We argue that UNM ROE will expand toward 12% over the next 5 years, while SFG’s ROE will likely be closer to 9%. SFG trades at premiums of 29% on P/B and 64% on P/E to UNM, despite a lower ROE and our view that it has greater EPS risk to low interest rates."
Other highlighed points include: 1) Greater interest rate sensitivity and EPS risk at SFG, UNM better equipped to weather low rate environment; and 2) UNM has greater capital flexibility and positions for accretive buybacks.
UNM's price target $26, SFG's $29.
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