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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. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
Headquartered in Carmel, CNO Financial (CNO - Free Report) is a Finance stock that has seen a price change of 13.4% so far this year. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 2.02%. In comparison, the Insurance - Multi line industry's yield is 1.96%, while the S&P 500's yield is 1.67%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.64 is up 8.5% from last year. In the past five-year period, CNO Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.96%. 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. CNO's current payout ratio is 18%, meaning it paid out 18% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CNO for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.21 per share, which represents a year-over-year growth rate of 3.88%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CNO is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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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. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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
Headquartered in Carmel, CNO Financial (CNO - Free Report) is a Finance stock that has seen a price change of 13.4% so far this year. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 2.02%. In comparison, the Insurance - Multi line industry's yield is 1.96%, while the S&P 500's yield is 1.67%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.64 is up 8.5% from last year. In the past five-year period, CNO Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 7.96%. 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. CNO's current payout ratio is 18%, meaning it paid out 18% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for CNO for this fiscal year. The Zacks Consensus Estimate for 2024 is $3.21 per share, which represents a year-over-year growth rate of 3.88%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, CNO is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).