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Anthem, Inc. ANTM continues to be in investors' good books owing to its healthy revenue stream and strategic measures. This leading health insurer also boasts an expanded product portfolio.
Over the past 30 days, the stock has witnessed its 2021 and 2022 earnings estimates move 0.2% and 0.1% north, respectively.
The company is well-poised for progress, evident from its VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
Now let’s see what makes it an investor favorite stock.
The currently Zacks Rank #2 (Buy) health insurer is witnessing solid revenues on the back of better membership and a higher premium rate. In the first quarter, revenues of $32.1 billion improved 9% year over year owing to increased premium revenues, attributable to the company’s strong Medicaid and Medicare businesses. We expect this favorable top-line trend to continue on its sturdy business growth.
Acquisitions helped the company boost its Medicare Advantage growth as well as add to its business portfolio. Anthem’s buyouts of Missouri and Nebraska Medicaid plans of WellCare Health in January 2020 added around 300000 Medicaid members under its coverage. In March this year, Anthem entered into an agreement to acquire myNEXUS, Inc., a home-based nursing management company for payors.
Last month, the leading health insurer completed the previously-announced purchase of Puerto Rico-based MMM Holdings, LLC and its Medicare Advantage (MA) plan MMM Healthcare, LLC. along with its affiliated companies and Medicaid plan. This move reinforces Anthem’s position as a valuable healthcare partner and is expected to help it deliver enhanced care management programs, paving the way for a whole-health experience for its members.
Following solid first-quarter 2021 results, the company even revised its 2021 guidance. Adjusted net income for the current year is projected to be more than $25.10, higher than the previous estimate of above $24.50 per share. The company is on track to achieve a long-term 12-15% annual adjusted EPS growth target.
Medical membership is still predicted in the range of 44.1-44.7 million, the midpoint indicating an upside of 3.5% from the 2020 reported figure. Operating revenues are anticipated at $135.1 billion, encompassing premium revenues of $114.5-$115.5 billion. The revenue view implies an upside of 10.9% from the 2020 reported figure.
A solid outlook should instill investor confidence in the stock.
It is noteworthy that the leading insurer resumed its share buyback activity in June 2020 despite pandemic adversities on the back of its solvency position.
The company initiated cash dividends in early 2011 and raised its dividend consistently. In January 2021, the company lifted its quarterly dividend by nearly 19%. It is also aggressively engaged in share buybacks, utilizing its excess capital to boost shareholder value.
Anthem expects to buy back shares worth $1.6 billion for 2021.
Its cash flow from operations remains impressive. In 2020, the same surged 76.3% year over year.
Shares of this company have gained 50.4% in the past year, outperforming its industry’s growth of 31.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other stocks worth considering in the same space are Magellan Health, Inc. MGLN, Molina Healthcare, Inc. MOH and UnitedHealth Group Incorporated UNH, each holding a Zacks Rank of 2 at present.
Magellan Health, Molina Healthcare and UnitedHealth Group came up with a trailing four-quarter surprise of 69.6%, 17.7% and 20.21% each, on average.
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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Molina Healthcare, Inc (MOH) : Free Stock Analysis Report
Magellan Health, Inc. (MGLN) : Free Stock Analysis Report
Anthem, Inc. (ANTM) : Free Stock Analysis Report
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