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Why You Should Add CNO Financial (CNO) to Your Portfolio

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·3 min read
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CNO Financial Group, Inc. CNO has been in investors' good books on the back of cost-cutting measures and investment in technology.

Over the past 30 days, the stock has witnessed its 2022 earnings estimate move 4.4% north over the past 30 days.

Now let’s see what makes this currently Zacks Rank #2 (Buy) company an investor favorite.

CNO Financial is a top-tier holding company for a group of insurance companies operating throughout the United States, which develops, administers and markets supplemental health insurance, annuity, individual life insurance and other insurance products. The company is steadily gaining from its healthy revenue stream, deferred care across its health lines and strong alternative investment performances.

It is continuously taking initiatives to lower its expenses. Given its efforts, benefits and expenses of the company were reduced 18.3% and 7.1%, respectively, year over year. Although benefits and expenses rose in the first half of this year, we are hopeful that its cost-curbing measures will aid its margins going forward. CNO Financial will pursue further strategic actions to control costs and enhance its earnings profile.

It invested significantly in technology to improve agent productivity as well as sales and advertising. This, in turn, is expected to enrich its online customer experience and enhance lead productivity. The company deployed technology, equipment and training to allow its agent to serve clients via virtual consultations and digital insurance applications.

Consumers can now buy Medicare products online. With added technology, CNO Financial has the accessibility to employer partners.

Its strategic measures like the buyout of DirectPath to boost its portfolio in the Worksite division also poise it well for growth. The acquisition is expected to bring the company some best-in-class benefits management services and better enrollment capabilities, which are in high demand among both employers and employees. It is even expected to widen its distribution reach for the post-COVID environment.

CNO Financial has been raising its quarterly dividend since 2013. It also deploys capital to share repurchase programs. It is committed to allocate 100% of excess capital, which should attract investors’ attention. The company returned $105 million to its shareholders through a combination of share repurchases and dividends in the second quarter.

The company is also poised for long-term growth on the back of a solid alternative investment performance, product and service launches, and strong contributions from its Consumer Division.

Shares of this company have surged 41.3% in a year’s time, underperforming its industry's growth of 41.7%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Other Stocks to Consider

Some other companies worth considering in the insurance space are American International Group, Inc. AIG, Aflac Incorporated AFL and Horace Mann Educators Corporation HMN, each presently holding a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings of American International Group, Aflac and Horace Mann Educators managed to deliver a trailing four-quarter surprise of 15.1%, 19.9% and 21.1%, respectively, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

American International Group, Inc. (AIG) : Free Stock Analysis Report

CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report

Aflac Incorporated (AFL) : Free Stock Analysis Report

Horace Mann Educators Corporation (HMN) : Free Stock Analysis Report

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Zacks Investment Research