CNO Financial Group, Inc. (NYSE:CNO) Looks Interesting, And It's About To Pay A Dividend
It looks like CNO Financial Group, Inc. (NYSE:CNO) is about to go ex-dividend in the next 4 days. Investors can purchase shares before the 9th of September in order to be eligible for this dividend, which will be paid on the 24th of September.
CNO Financial Group's upcoming dividend is US$0.12 a share, following on from the last 12 months, when the company distributed a total of US$0.48 per share to shareholders. Last year's total dividend payments show that CNO Financial Group has a trailing yield of 2.9% on the current share price of $16.78. If you buy this business for its dividend, you should have an idea of whether CNO Financial Group's dividend is reliable and sustainable. So we need to investigate whether CNO Financial Group can afford its dividend, and if the dividend could grow.
See our latest analysis for CNO Financial Group
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. CNO Financial Group paid out just 18% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see CNO Financial Group has grown its earnings rapidly, up 60% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, eight years ago, CNO Financial Group has lifted its dividend by approximately 25% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
To Sum It Up
Should investors buy CNO Financial Group for the upcoming dividend? Companies like CNO Financial Group that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. In summary, CNO Financial Group appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
So while CNO Financial Group looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 4 warning signs for CNO Financial Group (2 are a bit unpleasant!) that deserve your attention before investing in the shares.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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.
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