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CNO Financial (CNO)
NYSE:CNO
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CNO Financial
(NYSE:CNO)66Neutral
Positive Factors
Business Model
CNO's fundamental business model has positive characteristics, including differentiated exclusive distribution and a middle-income customer focus that mitigate against competitive pressures.
Financial Performance
CNO's operating EPS exceeded expectations, indicating strong financial performance.
Negative Factors
Valuation
Estimates do not suggest meaningful near-term improvement in CNO's ROE and free cash flow run-rates, and CNO screens as fairly valued.
CNO Financial (CNO) vs. S&P 500 (SPY)
Market Cap
$4.05B
Dividend Yield1.51%
Average Volume (3M)602.62K
Price to Earnings (P/E)10.7
Beta (1Y)1.02
Revenue Growth7.47%
EPS Growth55.84%
CountryUS
Employees3,500
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)3.74
Shares Outstanding100,877,840
10 Day Avg. Volume670,098
30 Day Avg. Volume602,618
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)N/A
Price to Sales (P/S)0.95
Price to Cash Flow (P/CF)5.50
P/FCF Ratio4.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$43.80Price Target Upside9.06% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
CNO Financial Business Overview & Revenue Model
Company DescriptionCNO Financial Group, Inc. is a holding company for a group of insurance companies operating primarily in the United States, focusing on middle-income consumers and seniors. CNO provides health insurance, life insurance, and annuity products through its subsidiaries, including Bankers Life, Colonial Penn, and Washington National. These subsidiaries deliver a range of financial security solutions designed to meet the needs of its clientele, offering products like long-term care insurance, Medicare supplement insurance, and various annuity options.
How the Company Makes MoneyCNO Financial Group generates revenue primarily through the sale of insurance products and annuities. The company earns premiums from policyholders in exchange for coverage, and these premiums represent the core revenue stream. Additionally, CNO generates investment income by investing the premiums received into diversified portfolios, including bonds and other securities, aiming to create returns that exceed the cost of the claims they pay out. The company's earnings are also influenced by factors such as underwriting margins, policyholder behavior, and the management of its investment portfolio. Key partnerships with agents and brokers enhance distribution capabilities, while strategic initiatives in digital transformation and customer engagement further drive growth and profitability.
CNO Financial Financial Statement Overview
Summary
CNO Financial shows solid revenue growth and improved profit margins, but faces challenges with negative equity and limited cash flow visibility. The absence of key data for 2024 (EBIT, EBITDA, and free cash flow) adds uncertainty to their financial stability.Income Statement
CNO Financial shows a notable revenue growth trajectory, with an increase from $4.15 billion in 2023 to $4.45 billion in 2024, marking a 7.29% growth. The net profit margin improved, reaching 9.08% in 2024 from 6.67% in 2023. However, EBIT and EBITDA margins are not available for 2024, indicating potential variability in operating efficiency.68
Positive
Balance Sheet
The balance sheet indicates a concerning financial position with negative stockholders' equity of $58.1 million in 2024, suggesting potential insolvency risks. The company shows no debt as of 2024, which reduces leverage risks, but the negative equity ratio and weakened return on equity, which was 12.48% in 2023 but cannot be calculated for 2024, are significant red flags.45
Neutral
Cash Flow
CNO Financial's cash flow statements reveal a lack of operating cash flow data for 2024, complicating analysis. The free cash flow to net income ratio cannot be calculated for 2024, but the operating cash flow to net income ratio was 2.11 in 2023, indicating strong cash conversion. The absence of free cash flow data in 2024 limits insight into cash generation capabilities.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.45B | 4.15B | 3.58B | 4.12B | 3.82B | Gross Profit |
| 4.45B | 3.10B | 3.58B | 4.12B | 3.82B | EBIT |
| 0.00 | 595.40M | 690.00M | 567.70M | 344.30M | EBITDA |
| 0.00 | 0.00 | 1.20B | 0.00 | 757.00M | Net Income Common Stockholders |
| 404.00M | 276.50M | 396.80M | 441.00M | 301.80M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 341.00M | 774.50M | 20.93B | 24.91B | 23.44B | Total Assets |
| 37.85B | 35.10B | 33.34B | 36.20B | 35.34B | Total Debt |
| 4.52B | 4.15B | 3.88B | 4.00B | 3.93B | Net Debt |
| -341.00M | 4.04B | 3.31B | 3.90B | 3.88B | Total Liabilities |
| 35.35B | 32.89B | 31.94B | 4.00B | 3.93B | Stockholders Equity |
| -58.10M | 2.22B | 1.40B | 5.26B | 5.48B |
| Cash Flow | Free Cash Flow | |||
| 627.70M | 582.90M | 495.40M | 598.30M | 735.50M | Operating Cash Flow |
| 627.70M | 582.90M | 495.40M | 598.30M | 735.50M | Investing Cash Flow |
| -494.80M | -872.30M | -1.78B | -1.53B | -608.40M | Financing Cash Flow |
| 660.40M | 533.50M | 1.20B | 667.60M | 210.10M |
CNO Financial Technical Analysis
Positive
40.16
Price Trends
39.03
Positive
38.14
Positive
34.37
Positive
Market Momentum
0.57
Positive
63.55
Neutral
79.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNO, the sentiment is Positive. The current price of 40.16 is below the 20-day moving average (MA) of 40.76, above the 50-day MA of 39.03, and above the 200-day MA of 34.37, indicating a bullish trend. The MACD of 0.57 indicates Positive momentum. The RSI at 63.55 is Neutral, neither overbought nor oversold. The STOCH value of 79.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNO.
CNO Financial Risk Analysis
CNO Financial disclosed 33 risk factors in its most recent earnings report. CNO Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CNO Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $9.68B | 21.25 | 20.83% | 1.24% | 10.06% | -13.72% | |
75 Outperform | $13.77B | 8.24 | 16.23% | 2.00% | 4.03% | 45.42% | |
67 Neutral | $6.11B | 1.95 | 39.61% | 4.75% | 47.95% | ― | |
66 Neutral | $4.05B | 10.74 | -695.35% | 1.51% | 7.47% | 55.84% | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
64 Neutral | $6.90B | 11.70 | 16.65% | 2.44% | 9.55% | 10.22% |
* Financial Sector Average
Performance Comparison
CNO
CNO Financial
40.16
13.86
52.70%
LNC
Lincoln National
35.88
10.59
41.87%
MET
Metlife
81.56
12.56
18.20%
PRI
Primerica
281.70
33.35
13.43%
UNM
Unum Group
77.91
28.67
58.23%
VOYA
Voya Financial
69.54
3.06
4.60%
CNO Financial Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 0.35% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
CNO Financial Group reported strong overall financial performance with record sales growth and substantial returns to shareholders. Despite a slight downturn in life production and some uncertainties in alternative investments, the company remains optimistic about its future growth prospects, especially with planned technological advancements.Highlights
Record Sales and Growth
CNO Financial Group delivered its tenth consecutive quarter of sales growth and achieved a record year in sales for both the Consumer and Worksite divisions. Total new annualized premium was up 7%, with notable records in multiple product lines.
Strong Financial Performance
Operating earnings per diluted share increased by 28%, and by 40% excluding significant items. The company returned $349 million to shareholders, a 50% increase over 2023, and raised its quarterly common stock dividend for the 12th consecutive year.
Investment Income and Capital Strength
CNO reported strong underwriting margins and favorable net investment income. Capital levels were well above target, with a risk-based capital ratio of 383% and generated $284 million in excess cash flow to the holding company for the year.
Technology and Efficiency Enhancements
Significant technology investments are planned to modernize systems, aiming to enhance sales growth and operational efficiency. A 3-year project costing approximately $170 million will focus on transitioning to cloud-based platforms.
Lowlights
Pressure on Life Production
Life production was down for the year, driven by direct-to-consumer television advertising challenges due to high lead costs during election years.
Uncertainty in Alternative Investments
While alternative investment results met expectations, there is an underlying risk of variability which could affect future performance.
Company Guidance
During the CNO Financial Group's Fourth Quarter 2024 earnings call, substantial guidance was provided for the fiscal year 2025. Key metrics included an operating earnings per share projection of $3.70 to $3.90, reflecting a continued focus on growth and profitability. The company aims to improve its operating return on equity by 50 basis points in 2025, targeting a 10.5% ROE, with a broader goal of achieving a 150 basis point improvement over three years. CNO also plans to invest approximately $170 million over three years in technology modernization, which is expected to enhance operational efficiency and support long-term growth. The excess cash flow to the holding company is projected to be between $200 million and $250 million, underscoring a strong capital position. Additionally, CNO plans to maintain a consolidated risk-based capital ratio of 375% and a target leverage between 25% and 28%. The company remains focused on expanding its geographic footprint and exploring further opportunities with its Bermuda platform.CNO Financial Corporate Events
Shareholder MeetingsStock BuybackDividendsBusiness Operations and Strategy
CNO Financial Announces $500 Million Stock Repurchase
Positive
Feb 12, 2025
On February 12, 2025, CNO Financial Group announced its Board’s approval of an additional $500 million for the repurchase of its outstanding common stock and declared a quarterly dividend of $0.16 per share, payable on March 24, 2025. These financial moves, coupled with the planned virtual shareholder meeting on May 8, 2025, position CNO to strengthen its market presence and demonstrate its commitment to shareholder value, reflecting positively on its strategic operations and stakeholder relations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.