On Jul 4, 2013, Zacks Investment Research upgraded
CNO Financial Group Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Strong organic growth and excess capital generation of CNO
Financial prompted the company to undertake the recent capital
deployment measures. The company's regular capital deployment and
dividend hike reflect management's confidence in the financial
strength of the company.
CNO Financial deployed $50 million to repurchase 4.4 million
shares during the second quarter of 2013. The company also spent
$9.4 million to buy back convertible debentures worth $4.5
million at a premium. This takes the total expenditure on
buybacks in the second quarter of 2013 to $59.4 million.
CNO Financial also made a principal prepayment of $18.9
million to fulfill the terms of its senior secured credit
agreement. Further, the company made a scheduled principal
payment of $5.7 million toward its term loan installment during
the second quarter. The company expects to spend another
$65.7-$115.7 million on the repurchase of securities in 2013,
taking the total amount to $250-$300 million.
Further, on May 8, 2013, the board of CNO Financial announced
a 50% hike in its quarterly cash dividend. Moreover, on May 20,
2013, the company amended its senior secured credit facility to
reduce the interest rate and increase financial flexibility.
These capital deployment measures are expected to boost CNO
Financial's earnings per share in the future. Currently, the
Zacks Consensus Estimate for the company's second-quarter 2013
earnings stands at 26 cents, up 31% year over year.
Other Stocks to Consider
Other multi-line insurance companies worth considering are
Enstar Group Limited
). All these companies carry a Zacks Rank #1 (Strong Buy).
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CNO FINL GRP (CNO): Free Stock Analysis
ENSTAR GROUP LT (ESGR): Free Stock Analysis
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