Are You Looking for a High-Growth Dividend Stock?

Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

CNO Financial in Focus

CNO Financial (CNO) is headquartered in Carmel, and is in the Finance sector. The stock has seen a price change of -4.27% since the start of the year. The insurance holding company is currently shelling out a dividend of $0.15 per share, with a dividend yield of 2.25%. This compares to the Insurance - Multi line industry's yield of 1.99% and the S&P 500's yield of 1.59%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.60 is up 1.7% from last year. CNO Financial has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 8.30%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. CNO's current payout ratio is 19%. This means it paid out 19% of its trailing 12-month EPS as dividend.

CNO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2024 is $3.17 per share, representing a year-over-year earnings growth rate of 2.59%.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, CNO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).

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CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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