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Why You Should Retain CNO Financial (CNO) in Your Portfolio
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CNO Financial Group, Inc. (CNO - Free Report) has been gaining traction from its cost-cutting measures and investment in technology.
Over the past 30 days, the stock has witnessed its 2020 and 2021 earnings estimates move 20% and 2.4% north, respectively.
The company is well-poised for progress, evident from its favorable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
CNO Financial came up with an earnings surprise of 39.1%, on average, beating estimates in all the trailing four quarters.
Now let’s see what makes the company an investor favorite.
The company’s third-quarter 2020 adjusted earnings per share of 79 cents beat the Zacks Consensus Estimate by 71.7% on the back of higher revenues, reduced costs and an improved margin in health insurance products.
It has been constantly taking measures to lower expenses. In 2019 and during the first nine months of 2020, benefits and expenses decreased 18.3% and 8.5%, respectively, year over year. Going forward, its expenses are expected to decline on the back of a cost-containment program.
Notably, the company invested significantly in technology to improve agent productivity as well as sales and advertising. This, in turn, is expected to improve online customer experience and enhanced lead productivity. The company deployed technology, equipment and training to allow its agent to serve clients via virtual consultations and digital insurance applications. Consumers can now buy Medicare products online.
CNO Financial has been raising its quarterly dividend since 2013. Frequently undertaken share repurchase programs have been a major capital allocation strategy for the company. It has also witnessed a steady cash flow for the past several years. Year to date, the company has returned $107 million in the form of share buybacks. It could buy back more shares in the third quarter on the back of its cash balance and Risk Based Capital ratio. At third-quarter end, its consolidated RBC ratio was 428%, up from 405%, sequentially. This should attract investors’ attention.
However, the company scrapped its 2020 guidance due to current market volatility induced by the COVID-19 pandemic. It also anticipates earnings for the remaining year to be affected by lower interest rates and an increased pressure on insurance product margin due to the coronavirus.
Shares of this currently Zacks Rank #3 (Hold) company have gained 24.9% in a year’s time against its industry's decline of 8.8%.
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early. See Zacks' 3 Best Stocks to Play This Trend >>
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Why You Should Retain CNO Financial (CNO) in Your Portfolio
CNO Financial Group, Inc. (CNO - Free Report) has been gaining traction from its cost-cutting measures and investment in technology.
Over the past 30 days, the stock has witnessed its 2020 and 2021 earnings estimates move 20% and 2.4% north, respectively.
The company is well-poised for progress, evident from its favorable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
CNO Financial came up with an earnings surprise of 39.1%, on average, beating estimates in all the trailing four quarters.
Now let’s see what makes the company an investor favorite.
The company’s third-quarter 2020 adjusted earnings per share of 79 cents beat the Zacks Consensus Estimate by 71.7% on the back of higher revenues, reduced costs and an improved margin in health insurance products.
It has been constantly taking measures to lower expenses. In 2019 and during the first nine months of 2020, benefits and expenses decreased 18.3% and 8.5%, respectively, year over year. Going forward, its expenses are expected to decline on the back of a cost-containment program.
Notably, the company invested significantly in technology to improve agent productivity as well as sales and advertising. This, in turn, is expected to improve online customer experience and enhanced lead productivity. The company deployed technology, equipment and training to allow its agent to serve clients via virtual consultations and digital insurance applications. Consumers can now buy Medicare products online.
CNO Financial has been raising its quarterly dividend since 2013. Frequently undertaken share repurchase programs have been a major capital allocation strategy for the company. It has also witnessed a steady cash flow for the past several years. Year to date, the company has returned $107 million in the form of share buybacks. It could buy back more shares in the third quarter on the back of its cash balance and Risk Based Capital ratio. At third-quarter end, its consolidated RBC ratio was 428%, up from 405%, sequentially. This should attract investors’ attention.
However, the company scrapped its 2020 guidance due to current market volatility induced by the COVID-19 pandemic. It also anticipates earnings for the remaining year to be affected by lower interest rates and an increased pressure on insurance product margin due to the coronavirus.
Shares of this currently Zacks Rank #3 (Hold) company have gained 24.9% in a year’s time against its industry's decline of 8.8%.
The performance looks stellar against other stock movements in the same space, such as Radian Group Inc. (RDN - Free Report) , Aflac Incorporated (AFL - Free Report) and American International Group, Inc. (AIG - Free Report) , which have lost 23.3%, 14.1% and 23.1%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>