CNO Financial Group (NYSE: CNO) and Principal Financial Group (NYSE:PFG) are both mid-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, institutional ownership, risk, dividends, analyst recommendations and profitability.
CNO Financial Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.5%. Principal Financial Group pays an annual dividend of $1.88 per share and has a dividend yield of 2.8%. CNO Financial Group pays out 15.7% of its earnings in the form of a dividend. Principal Financial Group pays out 42.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CNO Financial Group has raised its dividend for 5 consecutive years and Principal Financial Group has raised its dividend for 4 consecutive years.
Institutional and Insider Ownership
95.4% of CNO Financial Group shares are owned by institutional investors. Comparatively, 68.3% of Principal Financial Group shares are owned by institutional investors. 2.0% of CNO Financial Group shares are owned by insiders. Comparatively, 1.5% of Principal Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This table compares CNO Financial Group and Principal Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CNO Financial Group||9.61%||5.74%||0.81%|
|Principal Financial Group||10.15%||13.57%||0.63%|
Valuation & Earnings
This table compares CNO Financial Group and Principal Financial Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CNO Financial Group||$4.15 billion||0.99||$935.40 million||$2.29||10.58|
|Principal Financial Group||$12.56 billion||1.55||$1.88 billion||$4.40||15.30|
Principal Financial Group has higher revenue and earnings than CNO Financial Group. CNO Financial Group is trading at a lower price-to-earnings ratio than Principal Financial Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for CNO Financial Group and Principal Financial Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CNO Financial Group||1||5||1||0||2.00|
|Principal Financial Group||1||5||2||0||2.13|
CNO Financial Group presently has a consensus target price of $21.20, indicating a potential downside of 12.51%. Principal Financial Group has a consensus target price of $65.00, indicating a potential downside of 3.46%. Given Principal Financial Group’s stronger consensus rating and higher probable upside, analysts plainly believe Principal Financial Group is more favorable than CNO Financial Group.
Volatility & Risk
CNO Financial Group has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Principal Financial Group has a beta of 1.67, indicating that its share price is 67% more volatile than the S&P 500.
Principal Financial Group beats CNO Financial Group on 11 of the 17 factors compared between the two stocks.
CNO Financial Group Company Profile
CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States that develops, markets and administers health insurance, annuity, individual life insurance and other insurance products. The Company’s segments include Bankers Life, Washington National and Colonial Penn. It sells health insurance, annuity, individual life insurance and other insurance products through three primary distribution channels: career agents, independent producers and direct marketing. The Company offers products in various categories, including health, annuities and life insurance. The health products include Medicare supplement, long-term care, prescription drug plan and Medicare advantage, supplemental health products and other health products. The annuities products include fixed index annuities and other fixed interest annuities. The life insurance products include interest-sensitive life products and traditional life products.
Principal Financial Group Company Profile
Principal Financial Group, Inc. is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance. Its segments include Retirement and Income Solutions; Principal Global Investors, Principal International; U.S. Insurance Solutions, and Corporate. The Company offers a portfolio of products and services for retirement savings and retirement income. The Company’s Principal Global Investors segment manages assets for investors around the world. The Company offers pension accumulation products and services, mutual funds, asset management, income annuities and life insurance accumulation products. The Company’s U.S. Insurance Solutions segment provides group and individual insurance solutions. It focuses on small and medium-sized businesses, providing a range of retirement and employee benefit solutions, and individual insurance solutions to meet the needs of the business owners and their employees.
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