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This is Why CNO Financial (CNO) is a Great Dividend Stock
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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
CNO Financial (CNO - Free Report) is headquartered in Carmel, and is in the Finance sector. The stock has seen a price change of -4.08% since the start of the year. Currently paying a dividend of $0.11 per share, the company has a dividend yield of 2.53%. In comparison, the Insurance - Multi line industry's yield is 2.45%, while the S&P 500's yield is 1.8%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.44 is up 2.3% from last year. CNO Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.46%. Looking ahead, future dividend growth will be dependent on earnings growth and 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 22%, which means it paid out 22% 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 $1.87 per share, which represents a year-over-year growth rate of 3.89%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that CNO is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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This is Why CNO Financial (CNO) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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
CNO Financial (CNO - Free Report) is headquartered in Carmel, and is in the Finance sector. The stock has seen a price change of -4.08% since the start of the year. Currently paying a dividend of $0.11 per share, the company has a dividend yield of 2.53%. In comparison, the Insurance - Multi line industry's yield is 2.45%, while the S&P 500's yield is 1.8%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.44 is up 2.3% from last year. CNO Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 11.46%. Looking ahead, future dividend growth will be dependent on earnings growth and 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 22%, which means it paid out 22% 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 $1.87 per share, which represents a year-over-year growth rate of 3.89%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that CNO is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).