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Why CNO Financial (CNO) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
CNO Financial in Focus
Based in Carmel, CNO Financial (CNO - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -8.71%. Currently paying a dividend of $0.12 per share, the company has a dividend yield of 2.9%. In comparison, the Insurance - Multi line industry's yield is 2.6%, while the S&P 500's yield is 1.65%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 11.6% from last year. Over the last 5 years, CNO Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.69%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, CNO's payout ratio is 25%, which means it paid out 25% of its trailing 12-month EPS as dividend.
CNO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $2 per share, with earnings expected to increase 11.11% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CNO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Why CNO Financial (CNO) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
CNO Financial in Focus
Based in Carmel, CNO Financial (CNO - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -8.71%. Currently paying a dividend of $0.12 per share, the company has a dividend yield of 2.9%. In comparison, the Insurance - Multi line industry's yield is 2.6%, while the S&P 500's yield is 1.65%.
Looking at dividend growth, the company's current annualized dividend of $0.48 is up 11.6% from last year. Over the last 5 years, CNO Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 11.69%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, CNO's payout ratio is 25%, which means it paid out 25% of its trailing 12-month EPS as dividend.
CNO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2020 is $2 per share, with earnings expected to increase 11.11% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CNO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).