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CNO Financial (CNO) Up 48% in 6 Months: More Room to Run?

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  • CNO

CNO Financial Group, Inc. CNO has been gaining momentum from producing low risk products, and pursuing an integrated care delivery approach and constant technology upgradations. The company has beat estimates in the trailing four quarters.

Shares of the multiline insurer have gained 48.1% in the past six months compared with the industry and the Finance sector’s rally of 26.7% and 23.6%, respectively. The Zacks S&P 500 composite has risen 18.9% in the said time frame. With market capitalization of $3.3 billion, average volume of shares traded in the last three months was 0.9 million.

The company has an impressive Value Score of A, which reflects an attractive valuation of the stock.

Will the Bull Run Continue?

This Zacks Rank #3 (Hold) insurer is poised to benefit from a well-diversified product portfolio comprising life, fixed annuities, Medicare supplement, supplemental health and limited benefit duration long-term care (LTC). The products usually bear low risk and provide assurance of addressing the insurance needs of American middle market. A diversified portfolio also equips the company to manage risks effectively.

CNO Financial continues to roll out solutions for customers devoid of a financial product in the senior middle market, which has reinforced customers’ belief on the company. The solutions primarily strive to grow the asset value of clients and simultaneously take care of their escalating healthcare costs as they attain the age of retirement.

Moreover, CNO Financial has been pursuing a transformation strategy, wherein the company has started following an integrated care delivery model. The model brings protection, retirement planning and asset growth solutions under a single platform, which has paved the way for an omni-channel buying experience for its customers.

The company’s cost-control efforts have also started bearing fruits as operating expenses have started witnessing a downtrend from 2019. It has been making substantial investments in technology so that customers can opt for digital means while buying the company’s products.

Additionally, CNO Financial boasts a strong capital position. Though it has been following a conservative capital structure amid the pandemic, the company plans to pursue growth initiatives for bolstering product offerings and distribution network and undertake share repurchases as per market conditions. It targets leverage ratio between 22.5-25%. Also, the company has solid cash generation abilities.

Stocks to Consider

Some better-ranked stocks in the insurance space are Kemper Corporation KMPR, Manulife Financial Corporation MFC and Primerica, Inc. PRI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Kemper, Manulife Financial and Primerica have a trailing four-quarter earnings surprise of 24.01%, 6.87% and 10.04%, on average, respectively.

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CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report
Manulife Financial Corp (MFC) : Free Stock Analysis Report
Kemper Corporation (KMPR) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
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