Here’s something we haven’t seen much of over the past year – a financial services company that raised its dividend rather than cut it. Unum Group did just that today, increasing the payout by 10%. Now, the new dividend isn’t huge – it becomes 8.25 cents per share – but it does reflect a company that has stayed the course and continues to make money. It recently reported it made $164.9 million in the first quarter versus $163.1 million in the year-ago quarter. And that’s even after writing down $57 million in investment-related losses. Those losses come from investments in a media conglomerate, a specialty chemical company that went bankrupt and an auto-parts supplier. Unum is a provider of employee benefits and disability insurance.
It wasn’t that long ago, about six years or so, that Unum was on the ropes. It had posted big losses from bad investments, had to cut its dividend, de-leverage and sell some operations. But the company refocused and along the way took on a more conservative investment approach. However, it clearly missed the boat with these investments that tanked.
For the past three months, the stock is up 58% (now around $16.72) but for the past 12 months it is off 31%. The 52-week high is $29.86 and the low is $7.61.