Unum Raises Quarterly Dividend 9.8% to $0.505

Unum Group raised its quarterly common-stock dividend 9.8% to $0.505 a share from $0.46. The first payment at the new rate went ex-dividend July 24, 2026, and the annual dividend is $2.02 per share.

Why the dividend changed

Unum’s board authorized the higher rate as part of its regular quarterly dividend program. The increase announcement gave no specific operating trigger, and the subsequent declaration did not connect the change to a stock split, merger, spinoff or special distribution.

The operating context points instead to Unum’s capital position and cash generation. In the first quarter, the workplace-benefits insurer reported after-tax adjusted operating income of $352.5 million, premium growth of 3.9% on a constant-currency basis and an adjusted operating return on equity of 21.7%. It also repurchased about $400 million of shares and reported holding-company liquidity of $1.7 billion. Chief Executive Richard McKenney described those shareholder returns as part of a “disciplined capital deployment strategy.” Unum’s first-quarter results also set full-year after-tax adjusted operating income guidance at $8.60 to $8.90 per share.

Results reported after the declaration reinforced that backdrop. Second-quarter adjusted operating income was $346.0 million, constant-currency premium growth was 3.6%, and the adjusted operating return on equity was 21.4%. Unum ended the quarter with $1.5 billion of holding-company liquidity and an approximately 480% weighted-average risk-based capital ratio for its traditional U.S. insurers. Management said the businesses’ cash-flow profile supported continued dividends and repurchases. The second-quarter release maintained the full-year earnings outlook.

Dividend track record

The increase extends Unum’s dividend-growth streak to 17 consecutive years. The company’s last annual cut occurred in 2003, placing the current run well beyond the interruption that preceded it.

Recent payments show a consistent annual step-up rather than irregular special distributions. The quarterly rate was $0.42 through the October 25, 2024 ex-dividend date, moved to $0.46 beginning with the July 25, 2025 ex-dividend date, and rose to $0.505 with the July 24, 2026 ex-dividend date. The five-year annualized dividend-growth rate is 9.1%.

Full-year payments increased from $1.14 per share in 2020 to $1.17 in 2021, $1.26 in 2022, $1.39 in 2023, $1.57 in 2024 and $1.76 in 2025. Annual growth accelerated from 2.6% in 2021 to 13.0% in 2024 before moderating to 12.1% in 2025. The new quarterly rate continues that upward pattern.

Is the dividend covered?

The dividend consumes 43% of earnings. That payout ratio leaves most earnings outside the common dividend, providing room for insurance claims, operating investment, balance-sheet needs and other capital returns.

SmarterDividends rates the dividend A with a safety score of 93. That falls within the “very safe” range of 80-100 and indicates a substantial current coverage buffer. The grade is a risk assessment, not a guarantee: Unum’s capacity still depends on underwriting results, investment performance, regulatory capital and the experience of its long-term-care closed block.

Yield and valuation

At a share price of $92.85, Unum’s forward yield is 2.14%. That is below the Financial Services sector median forward yield of 5.70%, so the increase does not make Unum a high-yielding stock relative to its sector.

SmarterDividends estimates fair value at $125.82 and classifies the shares as undervalued, with 32% upside to that estimate. The company’s market value is $14.7 billion. The valuation assessment is separate from dividend safety: the yield describes current income at the stated share price, while fair value reflects the estimated value of the underlying shares.

What to watch

The main operational item is Unum’s pending $3.8 billion long-term-care reinsurance transaction with Fortitude Re. Management expects the deal to close in the second half of 2026, subject to regulatory approvals and other conditions. Together with an earlier transaction, it would place more than $7 billion of long-term-care statutory reserves with reinsurers, reducing the closed block’s footprint. Unum expects to retain $1.5 billion to $2.0 billion of holding-company liquidity and a risk-based capital ratio of 400% to 425% after closing. The transaction announcement makes execution and the resulting capital position central items for the next earnings update.

Investors can also track whether the $8.60 to $8.90 full-year adjusted operating earnings outlook remains intact, how premium growth and core margins develop, and whether capital deployment continues to balance dividends with repurchases and closed-block risk reduction. The next regular declaration will establish the timing of the next quarterly payment.