CNO Financial Group, Inc. (CNO - Free Report) has been in investors’ good books on the back of healthy revenue stream, decreasing expenditure and strong financial strength.
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.
Now let’s see what makes the company an investor favorite.
Recently, it reported first-quarter 2020 earnings per share of 58 cents, which beat the Zacks Consensus Estimate by 45%. The bottom line also improved 41.5% year over year owing to growth in health and life production along with stable margins and expense management.
Moreover, the company has been taking initiatives to lower costs. In 2019 and the first quarter of 2020, benefits and expenses decreased 18.3% and 17.7% year over year, respectively. The company will pursue more strategic actions to control costs and enhance its earnings profile.
The company also continued with its capital deployment plans, wherein it returned $99.2 million to its shareholders in the form of share buybacks and dividends within the first three months of 2020. 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, which should retain investor’s confidence in the stock.
The company invested significantly in technology to improve agent productivity as well as sales and advertising. This, in turn, is expected to enrich online customer experience and enhanced productivity.
Moreover, it announced its business transformation in January to boost cross-channel efficiencies and serve customers better.
However, the company’s high leverage continues to bother. Its total debt accounts for 36% (in-line sequentially) of the total capital, higher than its industry average of 30.3%. This raises its financial risk.
In a year's time, shares of the #Zacks Rank 3 (Hold) company have lost 25.8%, narrower than its industry's decline of 30.2%. The performance looks decent 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 32.1%, 37% and 51%, respectively. All these companies carry a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
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