The insurance sector isn’t being won by the flashiest marketing or the most complex derivative products — it’s being decided quietly, within the resilient middle-market households and retirement portfolios where financial security is a non-negotiable priority. As the "Silver Tsunami" of aging Americans moves from wealth accumulation to wealth protection, two pillars of the industry matter more than anything else: the life insurance that secures a family’s legacy, and the supplemental health and retirement solutions that protect a lifetime of savings.
This is where the insurance conversation shifts from commodity coverage to essential infrastructure — and where the most disciplined, high-margin winners are emerging.
👉 One company has become the undisputed volume leader in U.S. life insurance, operating a "basic protection" model that turns middle-market stability into double-digit earnings growth.
👉 The other is a tech-enabled retirement powerhouse, perfectly positioned at the intersection of the Medicare surge and the digital-first consumer.
👉 Both are undervalued, highly profitable, and currently receiving a wave of fresh "Buy" ratings from Wall Street’s top analysts.
In this edition, we break down the protection powerhouse and the retirement specialist anchoring the middle-market economy — and why these two stocks represent the most durable value plays in the financial sector today.
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Globe Life Inc. (NYSE: GL)
Globe Life Inc. (NYSE: GL) is a prominent insurance holding company that provides life and supplemental health insurance products primarily to the middle-income market. With a history spanning over 60 years, the company has established a massive footprint, issuing more life insurance policies than any other carrier in the U.S. through a multi-channel distribution network that includes exclusive agents, independent agents, and direct-to-consumer platforms.
Business Model and Revenue Streams 📦
Globe Life’s business model centers on providing "basic protection" insurance products—straightforward, high-demand policies designed for financial security. Unlike many competitors that focus on complex wealth management or high-net-worth clients, Globe Life targets the underserved lower-middle to middle-income demographic. The company operates through three primary revenue segments:
Life Insurance Premiums: This is the bedrock of the company, consistently accounting for approximately 69% of total premium revenue and over 80% of its underwriting margin. This segment focuses on term and whole life products sold through divisions like American Income Life (AIL) and Liberty National.
Health Insurance Premiums: Contributing about 31% of total premium revenue, this segment focuses on supplemental health products, including cancer insurance, accident coverage, and Medicare Supplement plans. This segment has shown aggressive sales momentum recently, particularly through the Family Heritage division.
Net Investment Income: As an insurer, Globe Life invests the premiums it collects before they are paid out as claims. The company maintains a conservative, primarily investment-grade fixed-income portfolio. In the current macroeconomic environment, higher interest rates have served as a significant tailwind, allowing the company to reinvest at higher yields and improve its spread.
Recent Performance and Corporate Developments 📈
Globe Life delivered a robust performance in the third quarter of 2025, characterized by significant growth in profitability despite a slight miss in top-line revenue expectations.
Q3 2025 Financial Highlights: 💰
- Total Revenue: Total revenue reached $1.51 billion, a steady increase year-over-year, though it slightly trailed the consensus estimate of $1.52 billion.
- Net Income: The company reported a net income of $388 million ($4.73 per diluted share), a massive 38% increase compared to the $3.44 per share in the year-ago quarter.
- Return on Equity (ROE): Globe Life maintained a stellar GAAP ROE of 21.9%, showcasing its ability to generate high returns on shareholder capital.
- Segment Growth: Life premiums grew by 3%, while health premiums jumped by 9%. Notably, the health segment's net sales surged by 21%, indicating a strong appetite for supplemental health products.
Strategic Initiatives and Mergers: 🤝
A major development in late 2025 was the acquisition of Beazley Benefits, an employee benefits company. This move is designed to expand Globe Life’s presence in the worksite and group benefits market, diversifying its distribution beyond individual policyholders. Furthermore, the company successfully concluded an SEC investigation in mid-2025 with no enforcement action recommended, removing a significant regulatory overhang that had previously weighed on the stock.
Profitability and Fair Value 🎯
Globe Life is exceptionally profitable, bolstered by disciplined underwriting and a 17% projected growth in net operating earnings for the full year 2025. Its profitability is driven by "remeasurement gains"—positive updates to mortality and lapse assumptions—and a focus on high-margin exclusive agency sales.
In terms of valuation, the stock appears undervalued relative to its historical performance and industry peers. It currently trades at a normalized P/E ratio of approximately 9.7x to 10.1x, which is lower than the industry average of roughly 12x to 13x. Many analysts suggest a "Fair Value" significantly higher than its current trading price of ~$140, with some Discounted Cash Flow (DCF) models placing the intrinsic value above $170 based on projected cash flows and consistent share buybacks.
Analyst Estimates and Ratings 📊
- Consensus Rating: The prevailing sentiment among Wall Street analysts is a "Buy" or "Strong Buy." Within the last 30 days, the stock has maintained a high concentration of positive ratings.
- Price Target: The average 12-month price target stands at approximately $168.30, suggesting an upside of over 20% from current levels. Some aggressive targets from firms like TD Cowen have reached as high as $199.
- Earnings Forecast: Analysts expect earnings to grow from $13.87 per share in 2025 to over $15.00 per share in 2026.
Investor-Focused Takeaway: Is GL Right for Your Portfolio?
Globe Life presents a compelling case for investors seeking a combination of value and growth within the financial sector. Its niche focus on the middle-income market provides a "defensive" moat, as these insurance products are often viewed as essential protections rather than discretionary expenses.
What to Watch in the Near Term: 📈
- Interest Rate Pivot: While high rates benefit investment income, any rapid decline in rates by the Fed could slightly dampen the yield on new investments.
- Agent Count Growth: The company has set a goal to surpass 28,000 exclusive agents by 2030; progress here is a leading indicator of future premium growth.
- Integration of Beazley: Watch for how quickly the Beazley Benefits acquisition contributes to the health segment's bottom line.
Recommendation:
Globe Life (GL) is a high-conviction "Buy" for those looking for an insurer with strong operational leverage, a clean regulatory slate, and a valuation that doesn't yet fully reflect its double-digit earnings growth potential.
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CNO Financial Group, Inc. (NYSE: CNO)
The second highlight in our Top Two Insurance Stocks series is CNO Financial Group, Inc. (NYSE: CNO). Headquartered in Carmel, Indiana, CNO is a premier financial services holding company that specializes in the "underserved" middle-income market. Through its well-known brands—including Bankers Life, Colonial Penn, and Washington National—it provides essential life insurance, health insurance, and retirement solutions to millions of American pre-retirees and retirees.
Business Model and Revenue Streams 📦
CNO Financial operates a "hybrid" distribution model, combining a massive network of over 3,400 producing agents with a sophisticated direct-to-consumer (D2C) digital platform. This allows them to meet customers however they prefer to shop. The company’s revenue is diversified across several high-demand areas:
- Annuities and Retirement: This is a major growth engine. CNO manages over $13 billion in annuity account values, earning revenue from the spread between investment returns and the interest credited to policyholders.
- Health Insurance: This segment focuses on supplemental products like Medicare Supplement and Long-Term Care (LTC). It is currently CNO's largest revenue contributor, driven by the "Silver Tsunami" of aging Americans seeking to bridge gaps in traditional Medicare.
- Life Insurance: From Colonial Penn’s famous "guaranteed acceptance" whole life to Bankers Life’s term products, this segment provides stable, long-term premium income.
- Brokerage and Advisory: A newer but rapidly growing stream where CNO earns fee-based revenue by managing client assets (currently over $5 billion) in brokerage accounts.
CNO is highly sensitive to interest rate policies. As a "spread-based" business, the company benefits from a higher-for-longer rate environment, which allows it to invest premiums into high-yielding fixed-income assets. Conversely, demographic shifts—such as the 11,000 Americans turning 65 every day—act as a permanent tailwind regardless of the broader economy.
Recent Performance and Corporate Developments 📈
CNO Financial is entering the final stretch of 2025 with massive momentum, having recently hit an all-time stock price high of $43.30 in December.
Q3 2025 Financial Highlights: 💰
- Operating Earnings: The company reported a stellar $1.29 per diluted share, a 16% increase year-over-year, crushing analyst estimates of $0.92.
- New Sales Growth: Total New Annualized Premiums (NAP) surged by 26%. Life insurance sales were particularly strong, jumping 32% compared to the previous year.
- Digital Transformation: A standout metric was the 56% growth in record direct-to-consumer life sales, largely due to a shift away from traditional TV advertising toward higher-margin digital and web channels.
- Shareholder Returns: CNO remained aggressive in returning capital, deploying $60 million into share buybacks and paying $16.4 million in dividends during the quarter.
Strategic Initiatives and Mergers: 🤝
In October 2025, CNO made a major strategic move by exiting the fee-services side of its Worksite Division.16 By offloading this lower-margin administrative business, management is sharpening its focus on high-growth insurance products.17 Additionally, the company completed its second major reinsurance transaction with its Bermuda affiliate, moving $1.8 billion in health reserves off its books to optimize its capital structure and boost its Return on Equity (ROE).
Profitability and Fair Value 🎯
CNO's profitability is at a multi-year high, with its Operating ROE reaching 12.1% in Q3. Management is so confident in its trajectory that they recently raised their 2027 ROE target, aiming for a total improvement of 200 basis points.
Regarding valuation, the stock presents a classic "growth at a reasonable price" (GARP) opportunity. While it recently hit record highs, it still trades at a normalized P/E of roughly 10.1x, which is below the broader insurance industry average of 13.4x. Some Discounted Cash Flow (DCF) models suggest a fair value as high as $67.00, indicating that the stock may still be significantly undervalued by nearly 35% relative to its long-term cash-generating power.
Analyst Estimates and Ratings 📊
- Consensus Rating: CNO has become an analyst favorite in the last 30 days, with Jefferies recently upgrading the stock to a "Buy." * Price Target: The average 12-month price target has climbed to $43.75, with top-tier analysts like Jefferies setting a target of $47.00.
- Earnings Outlook: The company narrowed its 2025 guidance to a higher range of $3.75–$3.85 per share, signaling a very strong finish to the year.
Investor-Focused Takeaway: Is CNO Right for Your Portfolio?
CNO Financial is no longer just a "boring" insurance company; it has evolved into a tech-enabled, capital-efficient machine. Its focus on the middle-market retirement niche gives it a level of insulation from economic downturns that larger, more diversified insurers lack.
What to Watch in the Near Term: 📈
- Worksite Efficiency: Watch for margin expansion in the Worksite division now that the fee-services segment has been exited.
- Digital Lead Costs: Monitor whether the shift to web-based leads continues to lower customer acquisition costs.
- Dividend Growth: With 14 consecutive years of dividend increases, look for a potential raise in early 2026.
Recommendation:
CNO Financial Group (CNO) is a top-tier pick for investors who want exposure to the aging U.S. demographic. With a record-breaking 2025 and a clear roadmap for ROE expansion through 2027, the stock remains a "Buy" for both value and income-focused portfolios.
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Final Take: The Protection Powerhouse and the Retirement Engine
The insurance revolution isn’t about complex financial engineering — it’s about capturing the essential needs of the American middle market. And that requires two things:
reliable protection that safeguards families and specialized retirement solutions that secure a lifetime of savings.
That’s where Globe Life (GL) and CNO Financial (CNO) stand apart.
🛡️ Globe Life (GL) — The High-Volume Protection Powerhouse
- Massive Scale: The #1 issuer of life insurance policies in the U.S. by volume.
- Margin Discipline: Exceptional 21.9% ROE driven by a low-cost, exclusive agency model.
- Macro Tailwinds: Reinvesting premiums into a higher-yield environment to drive record earnings.
- ➤ Best for: Investors seeking a defensive, high-moat value play with a clean regulatory slate and aggressive share buybacks.
🏥 CNO Financial (CNO) — The Digital-First Retirement Engine
- Demographic Dominance: Perfectly positioned to serve the "Silver Tsunami" of 11,000 Americans turning 65 daily.
- Sales Momentum: Recent 32% growth in life insurance and 56% surge in direct-to-consumer digital sales.
- Efficiency Shift: Exiting low-margin fee businesses to focus on high-growth, spread-based retirement products.
- ➤ Best for: Investors looking for a tech-enabled growth story within the insurance sector that offers both income and capital appreciation.
Investor Insight
🧩 Want essential life and health protection with industry-leading margins? → GL
⚙️ Want leveraged exposure to the retirement boom with high digital growth? → CNO
Bottom Line:
The financial sector doesn’t scale on complexity — it scales on accessibility and demographic alignment.
Globe Life owns the foundation of middle-market protection, while CNO Financial provides the essential roadmap for the retirement era. As the market shifts toward companies with real earnings power and structural tailwinds, GL and CNO aren’t just insurance stocks — they’re the foundation of a resilient portfolio.
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