- Oops!Something went wrong.Please try again later.
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you'd invested in Cigna (CI) ten years ago? It may not have been easy to hold on to CI for all that time, but if you did, how much would your investment be worth today?
Cigna's Business In-Depth
With that in mind, let's take a look at Cigna's main business drivers.
Headquartered in Bloomfield, CT and formed in 1982, Cigna Corp. is the result of a merger between Connecticut General Life Insurance Company and Insurance Company of North America. Cigna completed its combination with Express Scripts Holding Company by 2018-end. Shares of the new combined company have started trading on the NYSE under the stock ticker symbol “CI.”
The health service company updated its segment names to align with the launch of Evernorth and to better reflect a suite of services offered across its portfolio. With divesting its life, accident and supplemental benefits businesses to Chubb for $5.75 billion, it intends to focus more on the profitable global health services portfolio. The segment previously reported as Health Services is now reported as Evernorth and the segment previously reported as Integrated Medical is now reported as U.S Medical. There are no changes to the underlying businesses reported in either segment.
Evernorth (constitutes 72% of total revenues in 2020) includes a broad range of coordinated and point solution health services, including pharmacy services, benefits management, care solutions and data and analytics, which are provided to health plans, employers, government organizations, and health care providers.
U.S. Medical (24%) offers a variety of health care solutions to employers and individuals. Its sub-segment, the U.S. Commercial operating unit serves employers and their employees and other groups. This segment's products and services include medical, pharmacy, dental, behavioral health, vision, health advocacy programs and other products and services. Another sub-segment, the U.S. Government operating unit offers Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors (including the acquired Express Scripts' Medicare Part D business), Medicaid plans, and individual health insurance plans both on and off the public exchanges.
International Markets (4%) includes supplemental health, life and accident insurance products and health care coverage in the company’s international markets, as well as health care benefits to globally mobile employees of multinational organizations.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Cigna a decade ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in January 2012 would be worth $5,112.48, or a gain of 411.25%, as of January 19, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 249.92% and the price of gold increased 5.07% over the same time frame in comparison.
Analysts are forecasting more upside for CI too.
Cigna's revenues have been increasing consistently for the past several years. Its buyout of Express Scripts diversified its business by adding pharmacy benefits to the insurance operations. Business streamlining by divesting Group Life and Disability insurance business will help it focus on core growth areas. An expected increase in medical membership bodes well. In 2021, the company anticipates deploying over $7 billion to shareholders through share repurchase and dividend payments. Its shares have outperformed the industry in a year. However, high leverage is a concern for Cigna, affecting financial flexibility. Also, rising operating costs might dent its margins. Declining cash flow is worrisome. For 2021, the firm expects at least $7.5 billion of cash flow from operations, which indicates a decline of 27.5% from the 2020 reported number.
The stock has jumped 8.96% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2021; the consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Cigna Corporation (CI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research