In a bid to return more value to its shareholders, the Board of Directors of CNO Financial Group, Inc. (CNO) recently initiated a quarterly cash dividend of 2 cents per share. The dividend will be paid on June 25, 2012 to the shareholders of record as of June 11, 2012.
With an annualized rate of 8 cents per share, the dividend yield for the company stands at 1.1%. Though this is not very attractive for fresh investments in the stock, this will be an additional return to the existing shareholders of the company.
We think the cash position of CNO Financial is strong enough to support the dividend payment at least for the next three quarters. The company’s operating cash flow stood at $78.2 million as of March 31, 2012 and it had $173.5 million in cash and cash equivalents as of the same date.
Despite the announcement of a dividend initiation, there was no jump in the company’s share prices. Apart from less attractiveness of the return to new investors, it is likely that the soft performance of the company in the first quarter offset the good news. The share price closed at $6.84 on Wednesday on the New York Stock Exchange, down 2.2% from Tuesday’s close.
Over the last 7 days, none of the estimates of the covering analysts were raised for 2012. However, one estimate was nudged downward over the same period. The Zacks Consensus Estimate for second-quarter 2012 and full year 2012 are respectively 17 cents per share and 68 cents per share.
The company has consistently tried to enhance shareholders’ value through frequent share repurchases. In the last quarter CNO Financial repurchased shares worth $18.9 million.
The company currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Also, we have a long-term Neutral recommendation on the stock. CNO Financial competes with AFLAC Inc. (AFL) and Torchmark Corp. (TMK).
AFLAC INC (AFL): Free Stock Analysis Report
CNO FINL GRP (CNO): Free Stock Analysis Report
TORCHMARK CORP (TMK): Free Stock Analysis Report
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