On Jan 6, 2015, Zacks Investment Research upgraded CNO Financial Group, Inc. (CNO) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
CNO Financial has been witnessing rising earnings estimates on the back of a number of positive tidings at the company, which include enhanced capital deployment initiatives and improved earnings in the last reported quarter. The Zacks Consensus Estimate for 2014 increased 0.8% to $1.25 per share as an estimate was revised upward over the last 60 days.
Last quarter, CNO Financial increased its share repurchase program by $400 million. This increase is aimed at fulfilling the target of $350–$400 million worth of buybacks in 2014. CNO Financial spent $164.9 million toward the repurchase of shares and equivalents under its securities repurchase program in the last reported quarter. This includes buybacks worth $4.5 million settled in the fourth quarter of 2014.
UntilSep 30, 2014, the company deployed a total amount of $301.5 million toward repurchase of securities under the current program. As of that date, CNO Financial was left with 207.6 million shares under its current authorization and has the authority to buy back stocks worth up to $95.9 million.
The company continued with its steady dividend payout in the last quarter as well. Such capital deployments are expected to boost investors’ confidence in the stock. Moreover, increased share repurchases should lower the share count thereby boosting earnings per share in the upcoming period.
Earlier, CNO Financial reported third-quarter 2014 earnings that surpassed the Zacks Consensus Estimate and also rose year over year riding on higher sales, increased premiums and share repurchases.
Moreover, the company is now monitoring capital markets to implement a recapitalization of the balance sheet, although the exact time has been kept under wraps. On culmination, this recapitalization should reduce interest expenses significantly.
Other Stocks to Consider
Investors interested in the multiline insurance industry could also consider stocks like Ping An Insurance (Group) Company of China, Ltd. (PNGAY), Radian Group Inc. (RDN) and Assurant Inc. (AIZ). While Ping An Insurance and Radian Group have the same Zacks Rank as CNO Financial, Assurant carries a Zacks Rank #2 (Buy).
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