Yahoo Finance CNO Financial Group (NYSE:CNO) Is Increasing Its Dividend To US$0.14
The board of CNO Financial Group, Inc. (NYSE:CNO) has announced that it will be increasing its dividend on the 24th of June to US$0.14. This will take the annual payment to 2.6% of the stock price, which is above what most companies in the industry pay.
See our latest analysis for CNO Financial Group
CNO Financial Group's Earnings Easily Cover the Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, CNO Financial Group's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to fall by 26.6% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could be 23%, which we consider to be quite comfortable, with most of the company's earnings left over to grow the business in the future.
CNO Financial Group Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The first annual payment during the last 10 years was US$0.08 in 2012, and the most recent fiscal year payment was US$0.56. This implies that the company grew its distributions at a yearly rate of about 21% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. CNO Financial Group has seen EPS rising for the last five years, at 10% per annum. CNO Financial Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
CNO Financial Group Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that CNO Financial Group is a strong income stock thanks to its track record and growing earnings. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 4 warning signs for CNO Financial Group you should be aware of, and 2 of them are a bit unpleasant. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
