A month has gone by since the last earnings report for CNO Financial (
CNO Quick Quote CNO - Free Report) . Shares have lost about 8.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CNO due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
CNO Financial Q4 Earnings Beat on Lower Benefits & Expenses
CNO Financial Group reported fourth-quarter 2021 adjusted earnings per share of 87 cents, which beat the Zacks Consensus Estimate by 47.5%. The bottom line surged 43% year over year.
The better-than-expected quarterly results reflect better net investment income, reduced benefits and expenses, higher annuity collected premiums and better insurance margin.
Total revenues amounted to $1.1 billion, which dipped 0.1% year over year in the fourth quarter due to lower general account assets. However, the downside was partly mitigated by sound insurance policy income, the policyholder and other special-purpose portfolios, and fee revenues and other income. It beat the consensus mark by 18.7%.
Quarterly Operational Update
Total insurance policy income remained almost flat year over year to $629.9 million in the quarter under review.
Net investment income inched up 1.2% year over year.
Annuity collected premiums of $397.4 million climbed 15% year over year in the fourth quarter.
New annualized premiums for life and health products rose 2% year over year to $87.5 million.
Total benefits and expenses of $926.7 million declined 0.6% year over year due to reduced insurance policy benefits.
CNO Financial exited the fourth quarter with unrestricted cash and cash equivalents of $632.1 million, which plunged 32.6% from the 2020-end level.
Total assets amounted to $36.2 billion, which grew 2.4% from the figure as of Dec 31, 2020.
Total shareholders’ equity slipped 4.1% from the 2020-end level to $5.3 billion.
Book value per share was $43.69, which rose 8% year over year.
As of Dec 31, 2021, the debt-to-capital ratio of 17.8% improved 60 basis points (bps) year over year.
Share Repurchase and Dividend Update
CNO Financial rewarded $115.7 million to its shareholders with share buybacks to the tune of $100 million and dividends worth $15.7 million in the fourth quarter.
For 2021, adjusted earnings of $2.79 per share outpaced the Zacks Consensus Estimate of $2.53. The bottom line improved 10% year over year.
Total revenues climbed 7.9% year over year to $4.1 billion in the year.
Adjusted operating return on equity for 2021 was 12.1%.
During the year, CNO Financial returned capital worth $468.1 million to shareholders (via $402.4 million in share buybacks and $65.7 million through dividends).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 5.26% due to these changes.
At this time, CNO has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CNO has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.