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CNO Financial (CNO)
NYSE:CNO
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CNO Financial
(NYSE:CNO)
59Neutral
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
Profitability
Estimates do not suggest meaningful near-term improvement in CNO's ROE and free cash flow run-rates.
Valuation
CNO currently trades at an estimated 2025 FCF yield of ~6.5%, which is modestly lower/less attractive versus the Life peer median of ~6.9%.
CNO Financial (CNO) vs. S&P 500 (SPY)
Market Cap
$3.72B
Dividend Yield1.72%
Average Volume (3M)897.10K
Price to Earnings (P/E)13.0
Beta (1Y)0.88
Revenue Growth-0.43%
EPS Growth-16.22%
CountryUS
Employees3,500
SectorFinancial
Sector Strength85
IndustryInsurance - Life
Share Statistics
EPS (TTM)2.86
Shares Outstanding100,286,240
10 Day Avg. Volume806,002
30 Day Avg. Volume897,104
Financial Highlights & Ratios
PEG Ratio0.19
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.33
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.95
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$44.00Price Target Upside15.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
CNO Financial Business Overview & Revenue Model
Company DescriptionCNO Financial Group, Inc., through its subsidiaries, develops, markets, and administers health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. It offers Medicare supplement, supplemental health, and long-term care insurance policies; life insurance; and annuities, as well as Medicare advantage plans to individuals through phone, online, mail, and face-to-face. The company also focuses on worksite and group sales for businesses, associations, and other membership groups by interacting with customers at their place of employment. In addition, it provides fixed index annuities; fixed interest annuities, including fixed rate single and flexible premium deferred annuities; single premium immediate annuities; supplemental health products, such as specified disease, accident, and hospital indemnity products; and long-term care plans primarily to retirees and older self-employed individuals in the middle-income market. Further, the company offers universal life and other interest-sensitive life products; and traditional life policies that include whole life, graded benefit life, term life, and single premium whole life products, as well as graded benefit life insurance products. CNO Financial Group, Inc. markets its products under the Bankers Life, Washington National, and Colonial Penn brand names. The company sells its products through agents, independent producers, and direct marketing. CNO Financial Group, Inc. was founded in 1979 and is headquartered in Carmel, Indiana.
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
Negative
38.19
Price Trends
39.67
Negative
39.08
Negative
36.74
Positive
Market Momentum
-0.41
Negative
41.67
Neutral
28.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNO, the sentiment is Negative. The current price of 38.19 is above the 20-day moving average (MA) of 38.06, below the 50-day MA of 39.67, and above the 200-day MA of 36.74, indicating a neutral trend. The MACD of -0.41 indicates Negative momentum. The RSI at 41.67 is Neutral, neither overbought nor oversold. The STOCH value of 28.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
72 Outperform | $4.75B | 7.42 | 18.12% | 2.47% | 27.35% | ― | |
70 Outperform | $5.66B | 1.80 | 43.24% | 5.63% | 47.95% | ― | |
69 Neutral | $5.61B | 6.63 | 9.49% | 3.72% | 3.55% | 8.91% | |
66 Neutral | $2.82B | 10.08 | 2.73% | ― | -1.29% | 156.14% | |
64 Neutral | $12.65B | 9.74 | 8.04% | 17044.64% | 12.65% | -5.11% | |
59 Neutral | $3.72B | 12.98 | 12.47% | 1.72% | -0.43% | -16.22% | |
49 Neutral | $3.38B | 11.28 | 7.84% | ― | 14.74% | ― |
* Financial Sector Average
Performance Comparison
CNO
CNO Financial
38.19
11.59
43.57%
GNW
Genworth Financial
6.96
0.47
7.24%
LNC
Lincoln National
33.13
6.59
24.83%
BHF
Brighthouse Financial
58.89
9.90
20.21%
JXN
Jackson Financial Incorporation
81.62
12.89
18.75%
FG
F&G Annuities & Life Inc
35.89
-3.19
-8.16%
CNO Financial Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: -4.33%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Positive
The earnings call highlights strong growth in operating earnings, sales momentum across multiple divisions, and robust investment performance, offset by some challenges in revenue recognition for Medicare Advantage and declines in life production. The overall sentiment is cautiously optimistic, with reaffirmed guidance and a focus on leveraging business strengths amidst market uncertainties.Q1-2025 Updates
Positive Updates
Strong Operating Earnings Growth
Operating earnings per diluted share were $0.79, up 52% year-over-year, and $0.74 up 42% excluding significant items.
Sustained Sales Momentum
CNO delivered its 11th consecutive quarter of strong sales momentum and its ninth consecutive quarter of growth in producing agent count.
Annuity and Brokerage Growth
Annuity collected premiums were up 12%, account values were up 7%, and premium per policy was up 19%. Brokerage and advisory client assets were up 16%.
Medicare Portfolio Success
Medicare Supplement NAP increased by 24%, and Medicare Advantage policies grew by 42%.
Worksite Division Growth
Worksite insurance sales were up 11%, with critical illness insurance up 37% and life insurance up 17%.
Investment Performance
Net investment income grew with a new money rate above 6% for nine consecutive quarters, resulting in an investment income increase of 16% for the quarter.
Capital Management
Returned $117 million to shareholders and repurchased $100 million of shares, contributing to a 7% reduction in weighted average diluted shares outstanding.
Negative Updates
Medicare Advantage Revenue Recognition
Fee income was adversely impacted due to ASC 606 revenue recognition accounting for the sale of third-party Medicare Advantage policies, despite a 42% increase in policies sold.
Life Production Decline
Life production was down due to lower direct-to-consumer leads, affected by elevated TV advertising costs and a strategic pullback in marketing spend.
Persistency in Long-Term Care
Long-term Care NAP was down in the quarter due to strong comparables from the previous year.
Equity Market Impact on RBC
The RBC ratio was affected by a $25 million drag due to equity market weakness impacting the statutory accounting for FIAs.
Company Guidance
During CNO Financial Group's First Quarter 2025 earnings call, the company reaffirmed its guidance for the full year 2025 and three-year Return on Equity (ROE) targets. Operating earnings per diluted share increased by 52% to $0.79, and by 42% to $0.74, excluding significant items. The company reported its 11th consecutive quarter of strong sales momentum and a 9th consecutive quarter of growth in producing agent compensation. Annuity collected premiums rose by 12%, account values increased by 7%, and premium per policy grew by 19%. The book value per diluted share, excluding Accumulated Other Comprehensive Income (AOCI), was $37.03, up 6%. The company also noted a 42% increase in the sale of Medicare Advantage policies and a 24% rise in Medicare Supplement New Annualized Premiums (NAP). Furthermore, they highlighted a 16% increase in client assets in brokerage and advisory services. Investments in new money rates exceeded 6% for nine consecutive quarters, and the company's risk-based capital ratio stood at 379%.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.