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Here's Why You Should Retain CNO Financial in Your Portfolio
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CNO Financial Group, Inc. (CNO - Free Report) has been gaining traction from its cost-control efforts and investment in technology.
The company is well-poised for progress, evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
Over the past 60 days, the stock has witnessed its 2020 earnings estimates move 4.2% north to $2 per share.
CNO Financial came up with an earnings surprise of 20.1%, on average, beating on the bottom line in three of the trailing four quarters while missing on the same in one.
The company’s second-quarter 2020 adjusted earnings per share of 43 cents exceeded the Zacks Consensus Estimate by 30.3%. Its total revenues also improved 3.5% year over year to $1.01 billion on higher insurance policy income, improved income from policyholder and other special-purpose portfolios, and increased fee revenues and other income. The top line also outpaced the consensus mark by 23.4%.
Now let’s see what makes the company an investor favorite.
CNO Financial has been consistently making efforts to improve agent productivity, and sales and advertising. In June 2019, the company added a web chat facility to its Colonial Penn website, which will offer customers a unique omni-channel experience. In the third quarter of 2019, it entered into a new strategic technology partnership with Cognizant and HCL Technologies. With added technology, CNO Financial gains access to employer partners, which was initially absent due to dearth of a sophisticated benefits platform offer. All these initiatives helped it enhance lead productivity and provide better customer experience.
It has also been taking cost-curbing measures over a period of time. In 2019 and during the first six months of 2020, its benefits and expenses declined 18.3% and 10.2%, respectively, year over year. The company will pursue further strategic actions to control costs and enhance its earnings profile. We expect its expenses to decrease going forward on the back of its cost-containment program.
CNO Financial has been raising its quarterly dividend since 2013. Frequently conducted share repurchase programs are a major capital deployment strategy for the company. In 2019, the company returned capital worth $319 million to its shareholders. It also witnessed a steady cash flow for the past several years. This should attract investors’ attention.
However, due to the current market volatility and the uncertainty revolving around COVID-19, the company scrapped its 2020 guidance. It also anticipates the remaining year’s earnings to be affected by lower interest rates and an increased pressure on the insurance product margin due to the coronavirus.
The Zacks Consensus Estimate for current-year earnings is pegged at $2, indicating a rise of 11.1% from the prior-year reported number.
The price performance looks stellar in comparison to other stock movements in the same space, such as Chubb Limited (CB - Free Report) , Aflac Incorporated (AFL - Free Report) and American International Group, Inc. (AIG - Free Report) , which have lost 17%, 23.6% and 41.5%, respectively.
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Here's Why You Should Retain CNO Financial in Your Portfolio
CNO Financial Group, Inc. (CNO - Free Report) has been gaining traction from its cost-control efforts and investment in technology.
The company is well-poised for progress, evident from its favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
Over the past 60 days, the stock has witnessed its 2020 earnings estimates move 4.2% north to $2 per share.
CNO Financial came up with an earnings surprise of 20.1%, on average, beating on the bottom line in three of the trailing four quarters while missing on the same in one.
The company’s second-quarter 2020 adjusted earnings per share of 43 cents exceeded the Zacks Consensus Estimate by 30.3%. Its total revenues also improved 3.5% year over year to $1.01 billion on higher insurance policy income, improved income from policyholder and other special-purpose portfolios, and increased fee revenues and other income. The top line also outpaced the consensus mark by 23.4%.
Now let’s see what makes the company an investor favorite.
CNO Financial has been consistently making efforts to improve agent productivity, and sales and advertising. In June 2019, the company added a web chat facility to its Colonial Penn website, which will offer customers a unique omni-channel experience. In the third quarter of 2019, it entered into a new strategic technology partnership with Cognizant and HCL Technologies. With added technology, CNO Financial gains access to employer partners, which was initially absent due to dearth of a sophisticated benefits platform offer. All these initiatives helped it enhance lead productivity and provide better customer experience.
It has also been taking cost-curbing measures over a period of time. In 2019 and during the first six months of 2020, its benefits and expenses declined 18.3% and 10.2%, respectively, year over year. The company will pursue further strategic actions to control costs and enhance its earnings profile. We expect its expenses to decrease going forward on the back of its cost-containment program.
CNO Financial has been raising its quarterly dividend since 2013. Frequently conducted share repurchase programs are a major capital deployment strategy for the company. In 2019, the company returned capital worth $319 million to its shareholders. It also witnessed a steady cash flow for the past several years. This should attract investors’ attention.
However, due to the current market volatility and the uncertainty revolving around COVID-19, the company scrapped its 2020 guidance. It also anticipates the remaining year’s earnings to be affected by lower interest rates and an increased pressure on the insurance product margin due to the coronavirus.
The Zacks Consensus Estimate for current-year earnings is pegged at $2, indicating a rise of 11.1% from the prior-year reported number.
Shares of this currently Zacks Rank #3 (Hold) company have rallied 18.5% in a year’s time against its industry's decline of 10.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The price performance looks stellar in comparison to other stock movements in the same space, such as Chubb Limited (CB - Free Report) , Aflac Incorporated (AFL - Free Report) and American International Group, Inc. (AIG - Free Report) , which have lost 17%, 23.6% and 41.5%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q2 2020, while the S&P 500 gained an impressive +44.0%, five of our strategies returned +50.9%, +93.8%, +122.2%, +153.0%, and even +156.8%.
This outperformance has not just been a recent phenomenon. From 2000 – Q2 2020, while the S&P averaged +5.5% per year, our top strategies averaged up to +51.7% per year.
See their latest picks free >>