Comparing CNO Financial Group (NYSE:CNO) and Assured Guaranty (NYSE:AGO)

Assured Guaranty (NYSE:AGO) and CNO Financial Group (NYSE:CNO) are both mid-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.

Risk & Volatility

Assured Guaranty has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, CNO Financial Group has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Insider & Institutional Ownership

92.2% of Assured Guaranty shares are held by institutional investors. Comparatively, 95.4% of CNO Financial Group shares are held by institutional investors. 5.1% of Assured Guaranty shares are held by company insiders. Comparatively, 3.0% of CNO Financial Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Assured Guaranty pays an annual dividend of $1.36 per share and has a dividend yield of 1.6%. CNO Financial Group pays an annual dividend of $0.68 per share and has a dividend yield of 1.6%. Assured Guaranty pays out 16.9% of its earnings in the form of a dividend. CNO Financial Group pays out 23.8% 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. Assured Guaranty has increased its dividend for 7 consecutive years and CNO Financial Group has increased its dividend for 2 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Assured Guaranty	44.53%	7.18%	3.38%
CNO Financial Group	6.41%	16.63%	1.13%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Assured Guaranty and CNO Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assured Guaranty	0	2	2	0	2.50
CNO Financial Group	0	3	3	0	2.50

Assured Guaranty currently has a consensus price target of $98.50, suggesting a potential upside of 14.03%. CNO Financial Group has a consensus price target of $43.60, suggesting a potential upside of 5.76%. Given Assured Guaranty’s higher probable upside, equities research analysts clearly believe Assured Guaranty is more favorable than CNO Financial Group.

Valuation & Earnings

This table compares Assured Guaranty and CNO Financial Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assured Guaranty	$1.02 billion	4.04	$376.00 million	$8.06	10.72
CNO Financial Group	$4.44 billion	0.90	$404.00 million	$2.86	14.41

CNO Financial Group has higher revenue and earnings than Assured Guaranty. Assured Guaranty 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.

Summary

Assured Guaranty beats CNO Financial Group on 9 of the 16 factors compared between the two stocks.

About Assured Guaranty

Assured Guaranty Ltd., together with its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It operates through two segments: Insurance and Asset Management. The company offers financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. It insures and reinsures various debt obligations, including bonds issued by the United States state governmental authorities; and notes issued to finance infrastructure projects. In addition, the company insures and reinsures various the U.S. public finance obligations, such as general obligation, tax-backed, municipal utility, transportation, healthcare, higher education, infrastructure, housing revenue, investor-owned utility, renewable energy, and other public finance bonds. Further, the company involved in insuring and reinsuring of non-U.S. public finance obligations comprising regulated utilities, infrastructure finance, sovereign and sub-sovereign, renewable energy bonds, pooled infrastructure, and other public finance obligations; and the U.S. and non-U.S. Structured finance obligations, including residential mortgage-backed securities, life insurance transactions, consumer receivables securities, subscription finance facilities, pooled corporate obligations, and financial products. Additionally, it offers specialty business, such as real estate properties, insurance securitizations, and aircraft residual value insurance (RVI) transactions; and asset management services comprising investment advisory services. It markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities, as well as to investors in such obligations. Assured Guaranty Ltd. was incorporated in 2003 and is headquartered in Hamilton, Bermuda.

About CNO Financial Group

CNO Financial Group, Inc., through its subsidiaries, develops, markets, and administers health insurance, annuity, individual life insurance, insurance products, and financial services for senior and middle-income markets in the United States. It offers Medicare supplement, supplemental health, and long-term care insurance policies; life insurance; and annuities, as well as Medicare advantage plans to individuals through phone, online, mail, and face-to-face. The company also focuses on sale of voluntary benefit life and health insurance products for businesses, associations, and other membership groups by interacting with customers at their place of employment. In addition, it provides fixed indexed annuities; fixed interest annuities, including fixed rate single and flexible premium deferred annuities; single premium immediate annuities; supplemental health products, such as specified disease, accident, and hospital indemnity products; and long-term care plans primarily to retirees and older self-employed individuals in the middle-income market. Further, the company offers universal life and other interest-sensitive life products; and traditional life policies that include whole life, graded benefit life, term life, and single premium whole life products, as well as graded benefit life insurance products. It markets its products under the Bankers Life, Washington National, and Colonial Penn brand names. The company was founded in 1979 and is headquartered in Carmel, Indiana.