On July 17, 2012, we will buy Unum Group (UNM) at the market.
On July 16, 2012, it was announced that Unum Group (UNM) is going to increase the quarterly dividend by +23.5%, from $0.10 to $0.13 (found here). The increased dividend is payable to shareholders who hold the stock on or before July 26th. This increase of the quarterly dividend has brought UNM below the Altimeter level that would indicate that the stock should be bought.
On June 18, 2012, we pointed out the reasons why we like the dividend policy of UNM (found here). Also, the Altimeter readings for UNM based on the new dividend indicates that, at the current price, the stock is relatively undervalued.
Those wishing to follow our strategy of buying UNM should understand that the stock is expected to decline from current levels. This explains why we're only putting 10% of our portfolio into the stock at the present time. Our goal is to accumulate more shares as the price declines.
At the quarterly dividend rate of $0.13, we believe that UNM should be sold at a price of $40.95 or above. This will increase or decrease with the dividend policy. Based on the previous Altimeter buy indications, investors should expect to hold UNM for 3 to 6 years before the next sell signal.
