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Why You Should Add CNO Financial (CNO) to Your Portfolio Now
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CNO Financial Group, Inc. (CNO - Free Report) is poised for continued momentum, driven by the upward trajectory of new annualized premiums for health and life products, coupled with a steady increase in net investment income. Improvements in Life margin and Long-term care margin are additional factors expected to bolster the company's overall results.
CNO Financial — with a market cap of $3.1 billion — is a top-tier holding company for a group of insurance companies operating in the United States. It administers supplemental health insurance, annuity, individual life insurance and various other products. Due to solid prospects, this currently Zacks Rank #1 (Strong Buy) stock is worth investing in at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for CNO Financial’s 2023 earnings is pegged at $2.75 per share, indicating an 18% year-over-year increase. The company has witnessed two upward estimate revisions in the past 60 days against none in the opposite direction. CNO beat on earnings in one of the last four quarters, met once and missed twice. This is depicted in the graph below.
The consensus estimate for 2023 revenues stands at $3.7 billion, suggesting a 4.2% rise from the prior-year reported figure. Growth in insurance policy income is likely to be a major tailwind. The consensus mark for 2023 insurance policy income indicates 0.7% year-over-year growth.
Consumer division is expected to be fueled by new product rollouts and a rising agent count. CNO continues to leverage new technology to enhance the value provided to customers. Its MyHealthPolicy.com portal should unlock operational efficiencies for the company. CNO’s strategy of expanding to new geographical markets, agent recruitment and integration of Worksite under Optavise is expected to boost Worksite division’s top line in the future.
Furthermore, the Zacks Consensus Estimates for insurance policy income from Annuity, Life and Long-term care predict a 19.1%, 2.5% and 1.2% increase from the year-ago period, respectively. The consensus estimate for 2023 general account assets is pegged at $1.2 billion, which is expected to boost net investment income.
CNO Financial’s ROIC of 6.7% compares favorably with the industry average of 1.7%, demonstrating better capital efficiency compared to its industry peers, suggesting effective management of its investments. Its hybrid enrollment platform, Optavise, is driving improved enrollment attendance rates.
The company’s shareholder value-boosting efforts are noteworthy. In the third quarter of 2023, the company allocated $56.9 million to shareholders through a combination of $40 million in share buybacks and $16.9 million in dividends. As of Sep 30, 2023, CNO Financial still had $601.8 million in remaining funds allocated for repurchases.
Shares of the company have outperformed its industry in the past year and have more room to run. During this time, CNO shares rallied 19% compared with the industry’s increase of 0.8%.
CNO Financial’s long-term debt-to-capital stands at 63.1%, significantly above the industry's average of 25.3%. It exited the third quarter with unrestricted cash and cash equivalents of $460.8 million, which declined from the 2022-end level of $575.7 million. Also, higher insurance policy benefits, interest expenses and other operating costs are boosting its total costs, impacting overall margins.
However, we believe that a systematic and strategic plan of action will drive its long-term growth.
The bottom line of Artisan Partners outpaced estimates in each of the last four quarters, the average surprise being 22.3%. The Zacks Consensus Estimate for APAM’s 2024 earnings suggests an improvement of 6.6%, while the consensus mark for revenues suggests growth of 4.6% from the respective 2023 estimate.
Euronet’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 4.7%. The Zacks Consensus Estimate for EEFT’s 2024 earnings suggests an improvement of 12.8%, while the consensus mark for revenues suggests growth of 7.8% from the corresponding 2023 estimate. The consensus mark for EEFT’s 2024 earnings has moved 0.1% north in the past 30 days.
The bottom line of Trinity Capital outpaced estimates in two of the last four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 4.2%. The Zacks Consensus Estimate for TRIN’s 2024 earnings suggests an improvement of 1.1%, while the consensus mark for revenues suggests growth of 10.2% from the respective 2023 estimate. The consensus mark for TRIN’s 2024 earnings has moved 0.9% north in the past seven days.
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Why You Should Add CNO Financial (CNO) to Your Portfolio Now
CNO Financial Group, Inc. (CNO - Free Report) is poised for continued momentum, driven by the upward trajectory of new annualized premiums for health and life products, coupled with a steady increase in net investment income. Improvements in Life margin and Long-term care margin are additional factors expected to bolster the company's overall results.
CNO Financial — with a market cap of $3.1 billion — is a top-tier holding company for a group of insurance companies operating in the United States. It administers supplemental health insurance, annuity, individual life insurance and various other products. Due to solid prospects, this currently Zacks Rank #1 (Strong Buy) stock is worth investing in at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for CNO Financial’s 2023 earnings is pegged at $2.75 per share, indicating an 18% year-over-year increase. The company has witnessed two upward estimate revisions in the past 60 days against none in the opposite direction. CNO beat on earnings in one of the last four quarters, met once and missed twice. This is depicted in the graph below.
CNO Financial Group, Inc. Price and EPS Surprise
CNO Financial Group, Inc. price-eps-surprise | CNO Financial Group, Inc. Quote
The consensus estimate for 2023 revenues stands at $3.7 billion, suggesting a 4.2% rise from the prior-year reported figure. Growth in insurance policy income is likely to be a major tailwind. The consensus mark for 2023 insurance policy income indicates 0.7% year-over-year growth.
Consumer division is expected to be fueled by new product rollouts and a rising agent count. CNO continues to leverage new technology to enhance the value provided to customers. Its MyHealthPolicy.com portal should unlock operational efficiencies for the company. CNO’s strategy of expanding to new geographical markets, agent recruitment and integration of Worksite under Optavise is expected to boost Worksite division’s top line in the future.
Furthermore, the Zacks Consensus Estimates for insurance policy income from Annuity, Life and Long-term care predict a 19.1%, 2.5% and 1.2% increase from the year-ago period, respectively. The consensus estimate for 2023 general account assets is pegged at $1.2 billion, which is expected to boost net investment income.
CNO Financial’s ROIC of 6.7% compares favorably with the industry average of 1.7%, demonstrating better capital efficiency compared to its industry peers, suggesting effective management of its investments. Its hybrid enrollment platform, Optavise, is driving improved enrollment attendance rates.
The company’s shareholder value-boosting efforts are noteworthy. In the third quarter of 2023, the company allocated $56.9 million to shareholders through a combination of $40 million in share buybacks and $16.9 million in dividends. As of Sep 30, 2023, CNO Financial still had $601.8 million in remaining funds allocated for repurchases.
Shares of the company have outperformed its industry in the past year and have more room to run. During this time, CNO shares rallied 19% compared with the industry’s increase of 0.8%.
CNO Financial’s long-term debt-to-capital stands at 63.1%, significantly above the industry's average of 25.3%. It exited the third quarter with unrestricted cash and cash equivalents of $460.8 million, which declined from the 2022-end level of $575.7 million. Also, higher insurance policy benefits, interest expenses and other operating costs are boosting its total costs, impacting overall margins.
However, we believe that a systematic and strategic plan of action will drive its long-term growth.
Other Stocks to Consider
Some other top-ranked stocks in the Finance space are Artisan Partners Asset Management Inc. (APAM - Free Report) , Euronet Worldwide, Inc. (EEFT - Free Report) and Trinity Capital Inc. (TRIN - Free Report) . Artisan Partners currently sports a Zacks Rank #1, while Euronet and Trinity Capital carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Artisan Partners outpaced estimates in each of the last four quarters, the average surprise being 22.3%. The Zacks Consensus Estimate for APAM’s 2024 earnings suggests an improvement of 6.6%, while the consensus mark for revenues suggests growth of 4.6% from the respective 2023 estimate.
Euronet’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 4.7%. The Zacks Consensus Estimate for EEFT’s 2024 earnings suggests an improvement of 12.8%, while the consensus mark for revenues suggests growth of 7.8% from the corresponding 2023 estimate. The consensus mark for EEFT’s 2024 earnings has moved 0.1% north in the past 30 days.
The bottom line of Trinity Capital outpaced estimates in two of the last four quarters, matched the mark once and missed the same in the remaining one occasion, the average surprise being 4.2%. The Zacks Consensus Estimate for TRIN’s 2024 earnings suggests an improvement of 1.1%, while the consensus mark for revenues suggests growth of 10.2% from the respective 2023 estimate. The consensus mark for TRIN’s 2024 earnings has moved 0.9% north in the past seven days.