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CNO Financial Up 19.6% in 3 Months: Will You Regret Not Buying in?
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The insurance player, CNO Financial Group, Inc. (CNO - Free Report) , continues to exhibit a growing agent force and improving underwriting margins. The company has seen its shares rise 19.6% in the past three months, outpacing the industry’s 3.5% growth. The company also outperformed the S&P 500’s return of 0.6%. Currently priced at $32.11, the stock is a little below its 52-week high of $35.45.
Given this impressive performance, can investors still consider buying CNO Financial stock, or should you book profits?
CNO’s Three-Month Price Performance
Image Source: Zacks Investment Research
The stock is trading above its 50-day and 200-day moving averages, indicating solid upward momentum. This proximity to its 52-week high underscores investor confidence and market optimism about this multi-line insurance company’s prospects.
Solid Reasons to Like CNO
The company’s focus on the underserved middle-income market, its unique distribution model and broad product offerings are major tailwinds. Thanks to these, it achieved its eighth consecutive quarter of sales growth in the second quarter of 2024. Its new product launches, geographic expansionary measures and agent productivity improvements through customer referrals will likely drive its sales growth.
It invests significantly in technology to improve agent productivity and sales. This is expected to improve the online customer experience and enhance productivity. Leveraging technology such as artificial intelligence (AI) will improve its efficiency, which will continue to support its return on equity (ROE). CNO currently has a ROE of 18.3%, higher than the industry average of 16.2%.
CNO Financial has consistently increased its quarterly dividend since 2013. In the first half of 2024, it distributed $117.3 million through share buybacks and $34.5 million through dividends. As of June 30, 2024, the company had $421.8 million remaining for repurchase funds.
Improving insurance product margin, general account assets, and new annualized premiums will continue to support its bottom-line growth. Now, let’s look at how the estimates are standing for CNO.
Estimates for CNO & Surprise History
The Zacks Consensus Estimate for 2024 adjusted earnings for CNO Financial is currently pegged at $3.43 per share, indicating 11% year-over-year growth. The consensus mark for next year suggests a further 6.2% jump. It beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 21.2%. This is depicted in the figure below.
The consensus estimate for 2024 and 2025 revenues are pegged at $3.7 billion and $3.8 billion, respectively.
Key Concerns for CNO
There are a few factors that investors should keep an eye on. One of them is:
It exited the second quarter with unrestricted cash and cash equivalents of $566.3 million, which decreased from the 2023-end level of $878.8 million. The amount was much lower than the long-term debt of around $4 billion. The company’s long-term debt-to-capital stands at 62.3%, much higher than the industry's average of 26.4%.
Final Verdict: Buy CNO Stock Now
If you believe in the long-term potential of the company’s expansionary measures and are prepared for the associated risks, buying shares now could pay off. CNO Financial’s sales growth initiatives, investments in technology and impressive returns make it an attractive choice for investors. It offers substantial upside potential from the current price levels. The earnings estimates indicating further profit growth add to its appeal.
Investors interested in the broader Finance space may look at some other top-ranked players like MGIC Investment Corporation (MTG - Free Report) ,Jackson Financial Inc. (JXN - Free Report) and WisdomTree, Inc. (WT - Free Report) . While MGIC Investment currently sports a Zacks Rank #1, Jackson Financial and WisdomTree carry a Zacks Rank #2 (Buy) each.
The Zacks Consensus Estimate for MGIC Investment’s current-year earnings suggests a 9.1% year-over-year increase. During the past month, MTG has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for current-year revenues is pegged at $1.2 billion, indicating a 4.7% increase from a year ago.
The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $18.49 per share, which indicates 44% year-over-year growth. It witnessed two upward estimate revisions in the past 60 days against no downward movement. The consensus mark for JXN’s current year revenues suggests a 116.7% surge from a year ago.
The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 67.6% year-over-year growth. During the past month, WT has witnessed two upward estimate revisions against none in the opposite direction. It beat earnings estimates twice in the past four quarters and met on the other occasions, with an average surprise of 5.9%.
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CNO Financial Up 19.6% in 3 Months: Will You Regret Not Buying in?
The insurance player, CNO Financial Group, Inc. (CNO - Free Report) , continues to exhibit a growing agent force and improving underwriting margins. The company has seen its shares rise 19.6% in the past three months, outpacing the industry’s 3.5% growth. The company also outperformed the S&P 500’s return of 0.6%. Currently priced at $32.11, the stock is a little below its 52-week high of $35.45.
Given this impressive performance, can investors still consider buying CNO Financial stock, or should you book profits?
CNO’s Three-Month Price Performance
The stock is trading above its 50-day and 200-day moving averages, indicating solid upward momentum. This proximity to its 52-week high underscores investor confidence and market optimism about this multi-line insurance company’s prospects.
Solid Reasons to Like CNO
The company’s focus on the underserved middle-income market, its unique distribution model and broad product offerings are major tailwinds. Thanks to these, it achieved its eighth consecutive quarter of sales growth in the second quarter of 2024. Its new product launches, geographic expansionary measures and agent productivity improvements through customer referrals will likely drive its sales growth.
It invests significantly in technology to improve agent productivity and sales. This is expected to improve the online customer experience and enhance productivity. Leveraging technology such as artificial intelligence (AI) will improve its efficiency, which will continue to support its return on equity (ROE). CNO currently has a ROE of 18.3%, higher than the industry average of 16.2%.
CNO Financial has consistently increased its quarterly dividend since 2013. In the first half of 2024, it distributed $117.3 million through share buybacks and $34.5 million through dividends. As of June 30, 2024, the company had $421.8 million remaining for repurchase funds.
Improving insurance product margin, general account assets, and new annualized premiums will continue to support its bottom-line growth. Now, let’s look at how the estimates are standing for CNO.
Estimates for CNO & Surprise History
The Zacks Consensus Estimate for 2024 adjusted earnings for CNO Financial is currently pegged at $3.43 per share, indicating 11% year-over-year growth. The consensus mark for next year suggests a further 6.2% jump. It beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 21.2%. This is depicted in the figure 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 2024 and 2025 revenues are pegged at $3.7 billion and $3.8 billion, respectively.
Key Concerns for CNO
There are a few factors that investors should keep an eye on. One of them is:
It exited the second quarter with unrestricted cash and cash equivalents of $566.3 million, which decreased from the 2023-end level of $878.8 million. The amount was much lower than the long-term debt of around $4 billion. The company’s long-term debt-to-capital stands at 62.3%, much higher than the industry's average of 26.4%.
Final Verdict: Buy CNO Stock Now
If you believe in the long-term potential of the company’s expansionary measures and are prepared for the associated risks, buying shares now could pay off. CNO Financial’s sales growth initiatives, investments in technology and impressive returns make it an attractive choice for investors. It offers substantial upside potential from the current price levels. The earnings estimates indicating further profit growth add to its appeal.
CNO currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Top-Ranked Players
Investors interested in the broader Finance space may look at some other top-ranked players like MGIC Investment Corporation (MTG - Free Report) ,Jackson Financial Inc. (JXN - Free Report) and WisdomTree, Inc. (WT - Free Report) . While MGIC Investment currently sports a Zacks Rank #1, Jackson Financial and WisdomTree carry a Zacks Rank #2 (Buy) each.
The Zacks Consensus Estimate for MGIC Investment’s current-year earnings suggests a 9.1% year-over-year increase. During the past month, MTG has witnessed one upward estimate revision against none in the opposite direction. The consensus mark for current-year revenues is pegged at $1.2 billion, indicating a 4.7% increase from a year ago.
The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $18.49 per share, which indicates 44% year-over-year growth. It witnessed two upward estimate revisions in the past 60 days against no downward movement. The consensus mark for JXN’s current year revenues suggests a 116.7% surge from a year ago.
The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 67.6% year-over-year growth. During the past month, WT has witnessed two upward estimate revisions against none in the opposite direction. It beat earnings estimates twice in the past four quarters and met on the other occasions, with an average surprise of 5.9%.