CNO Financial Hikes Dividend, Announces Share Buyback Plan

The board of directors of CNO Financial Group (NYSE:CNO) recently announced a dividend hike along with a share repurchase program. Year to date, the stock has gained approximately 11% compared with the 1% increase by the Zacks classified Multi Line Insurance industry.

In a bid to return more value to shareholders, the board of directors of CNO Financial approved a 13% hike in its quarterly dividend. Previously, the company raised its dividend by nearly 14% in May 5, 2016. In fact, the insurer’s operating strength enables it to increase dividend each year. The company has grown its dividend at a five-year CAGR (2012–2017) of 7.9%.

The company will now reward investors with a dividend of 9 cents per share as against 8 cents paid on Feb 27, 2017. Shareholders on record as of Jun 9, 2017, will have the meatier dividend in their pockets on Jun 23, 2017. Based on the closing share price of $21.08 as of May 12, the increased payout translates to a dividend yield of 1.71%.

This apart, CNO Financial’s board approved an additional $300 million to repurchase the company's outstanding common stock. As of Mar 31, 2017, the company bought back $43.0 million of common stock and was left with approximately $210 million of authorization remaining.

Dividend hikes and share buybacks not only testify to the operational and financial strength of a company, but also make a stock attractive for yield-seeking investors. CNO Financial’s strong capital management policy is largely supported by its solid cash flow generation, which in turn, is driven by consistently strong operational performance.

Zacks Rank and Stocks to Consider

CNO Financial has a Zacks Rank #3 (Hold).

Some better-ranked multi line insurers are Cigna Corporation (NYSE:CI) , James River Group Holdings, Ltd. (NASDAQ:JRVR) and Old Republic International Corporation (NYSE:ORI) . All of the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cigna’s earnings beat estimates in three of the last four quarters with an average earnings surprise of 1.35%.

Another multi line insurer, James River Group, delivered positive earnings surprise in the last four quarters with an average positive surprise of 9.47%.

Old Republic International surpassed expectations in two of the last four quarters with an average beat of 11.37%.

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