CNO Financial Group Inc.
) announced that it repurchased approximately 8.64 million shares
for $9.34 per share in the fourth quarter of 2012. The
repurchased shares represented 3.8% of the 230 million shares
outstanding at the end of the third quarter.
CNO Financial spent $80.7 million in aggregate for the buyback
in the fourth quarter, thus taking the company's total
expenditure on share repurchase in 2012 to $180.2 million. The
company repurchased 21.53 million shares at an average price of
$8.37 per share in 2012.
In December 2012, the board of directors of CNO Financial
approved a hike of $300 million in the company's buyback program,
which had an outstanding balance of $60 million at that time. The
outstanding balance in the securities buyback program stood at
$350 million at the end of 2012. CNO Financial can use the
balance in the buyback program to repurchase its outstanding
stock, warrants and convertible debentures through open market
transactions, private transactions or via tender offers.
Additionally, CNO Financial made a principal repayment of 33%
of the amount spent on share repurchases and dividend payments,
as required by its senior secured credit agreement. This amounted
to $28.4 million, while the company spent an additional $2
million for the payment of the residual portion of the scheduled
installment of its term loans. The next installment payment of
$12.5 million is scheduled on March 31, 2013.
CNO Financial's strong organic growth and excess capital
generation allows it to constantly return capital to
shareholders. The company announced a hike in its securities
repurchase authorization twice in 2012. CNO Financial also
initiated a dividend policy in May last year.
CNO Financial carries a Zacks #3 Rank (Hold). We maintain a
long-term 'Neutral' recommendation on the stock. Peer
Prudential Financial, Inc.
) carries a Zacks #2 Rank (Buy).
CNO FINL GRP (CNO): Free Stock Analysis
PRUDENTIAL FINL (PRU): Free Stock Analysis
To read this article on Zacks.com click here.