CNO Financial Group (NYSE:CNO – Get Free Report) and HCI Group (NYSE:HCI – Get Free Report) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, earnings, risk, valuation and institutional ownership.
Volatility & Risk
CNO Financial Group has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, HCI Group has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.
Valuation & Earnings
This table compares CNO Financial Group and HCI Group”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CNO Financial Group | $4.49 billion | 1.15 | $229.30 million | $2.91 | 19.09 |
| HCI Group | $952.69 million | 2.45 | $299.01 million | $23.20 | 8.09 |
HCI Group has lower revenue, but higher earnings than CNO Financial Group. HCI Group 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 and Institutional Ownership
95.4% of CNO Financial Group shares are held by institutional investors. Comparatively, 87.0% of HCI Group shares are held by institutional investors. 3.4% of CNO Financial Group shares are held by insiders. Comparatively, 18.5% of HCI Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares CNO Financial Group and HCI Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CNO Financial Group | 6.02% | 18.76% | 1.24% |
| HCI Group | 32.60% | 28.80% | 12.25% |
Dividends
CNO Financial Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. HCI Group pays an annual dividend of $1.60 per share and has a dividend yield of 0.9%. CNO Financial Group pays out 24.7% of its earnings in the form of a dividend. HCI Group pays out 6.9% 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 2 consecutive years. CNO Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a summary of recent recommendations for CNO Financial Group and HCI Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CNO Financial Group | 0 | 3 | 2 | 0 | 2.40 |
| HCI Group | 0 | 2 | 5 | 0 | 2.71 |
CNO Financial Group currently has a consensus price target of $56.00, suggesting a potential upside of 0.81%. HCI Group has a consensus price target of $241.67, suggesting a potential upside of 28.77%. Given HCI Group’s stronger consensus rating and higher probable upside, analysts plainly believe HCI Group is more favorable than CNO Financial Group.
Summary
HCI Group beats CNO Financial Group on 12 of the 17 factors compared between the two stocks.
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.
About HCI Group
HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.
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