Aflac (NYSE:AFL) and CNO Financial Group (NYSE:CNO) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.
Risk and Volatility
Aflac has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.
Dividends
Aflac pays an annual dividend of $1.32 per share and has a dividend yield of 2.7%. CNO Financial Group pays an annual dividend of $0.48 per share and has a dividend yield of 2.0%. Aflac pays out 29.7% of its earnings in the form of a dividend. CNO Financial Group pays out 26.7% 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 39 consecutive years and CNO Financial Group has raised its dividend for 6 consecutive years. Aflac is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
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 | 21.11% | 12.12% | 2.28% |
CNO Financial Group | 12.27% | 7.21% | 0.98% |
Earnings and Valuation
This table compares Aflac and CNO Financial Group's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Aflac | $22.31 billion | 1.50 | $3.30 billion | $4.44 | 10.95 |
CNO Financial Group | $4.02 billion | 0.81 | $409.40 million | $1.80 | 13.47 |
Aflac has higher revenue and earnings than CNO Financial Group. Aflac is trading at a lower price-to-earnings ratio than CNO Financial Group, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
66.0% of Aflac shares are owned by institutional investors. Comparatively, 98.1% of CNO Financial Group shares are owned by institutional investors. 1.4% of Aflac shares are owned by company insiders. Comparatively, 2.0% of CNO Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Aflac and CNO Financial Group, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Aflac | 1 | 4 | 3 | 0 | 2.25 |
CNO Financial Group | 0 | 1 | 3 | 0 | 2.75 |
Aflac presently has a consensus target price of $46.6667, suggesting a potential downside of 4.06%. CNO Financial Group has a consensus target price of $24.00, suggesting a potential downside of 1.07%. Given CNO Financial Group's stronger consensus rating and higher probable upside, analysts plainly believe CNO Financial Group is more favorable than Aflac.
Summary
Aflac beats CNO Financial Group on 9 of the 16 factors compared between the two stocks.