Aflac (NYSE: AFL) and CNO Financial Group (NYSE:CNO) are both mid-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.

Dividends

Aflac pays an annual dividend of $1.72 per share and has a dividend yield of 2.1%. CNO Financial Group pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. Aflac pays out 25.9% of its earnings in the form of a dividend. CNO Financial Group pays out 15.7% 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. Aflac has raised its dividend for 4 consecutive years and CNO Financial Group has raised its dividend for 34 consecutive years.

Insider and Institutional Ownership

64.6% of Aflac shares are owned by institutional investors. Comparatively, 97.1% of CNO Financial Group shares are owned by institutional investors. 3.0% of Aflac shares are owned by insiders. Comparatively, 2.0% of CNO Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Aflac and CNO Financial Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aflac $22.65 billion 1.40 $4.75 billion $6.63 12.08
CNO Financial Group $4.15 billion 0.91 $935.40 million $2.29 9.75

Aflac has higher revenue and earnings than CNO Financial Group. CNO Financial Group is trading at a lower price-to-earnings ratio than Aflac, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings for Aflac and CNO Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aflac 2 7 2 0 2.00
CNO Financial Group 1 6 1 0 2.00

Aflac currently has a consensus price target of $75.56, indicating a potential downside of 5.63%. CNO Financial Group has a consensus price target of $20.50, indicating a potential downside of 8.20%. Given Aflac’s higher possible upside, analysts plainly believe Aflac is more favorable than CNO Financial Group.

Risk & Volatility

Aflac has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Profitability

This table compares Aflac and CNO Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aflac 11.98% 13.09% 2.05%
CNO Financial Group 9.61% 5.74% 0.81%

Summary

Aflac beats CNO Financial Group on 12 of the 16 factors compared between the two stocks.

Aflac Company Profile

Aflac Incorporated is a business holding company. The Company is involved in supplemental health and life insurance, which is marketed and administered through its subsidiary, American Family Life Assurance Company of Columbus (Aflac). The Company’s insurance business consists of two segments: Aflac Japan and Aflac U.S. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans. The Company designs the United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. offers accident coverage on both an individual and group basis. The Company offers cancer plans, critical illness plans, and critical care and recovery plans.

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.

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