Why should you keep Anthem (ANTM) in your wallet? – October 6, 2021
Anthem, Inc. (ANTM – Free Report) has grown thanks to a healthy revenue stream and strategic initiatives. This leading health insurer also has an expanded product portfolio.
The company is well positioned to progress, as evidenced by 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 the three factors.
Along with the second quarter results, this company currently ranked 3rd (Hold) of Zacks has raised its guidance for 2021. Adjusted net income for the full year is expected to be above $ 25.50 per share. which indicates growth from the previous estimate of over $ 25.10. It is on track to meet a long-term annual adjusted EPS growth target of 12-15%.
Now dig deep to see what makes it a favorite stock for investors.
The first health insurer is a dynamic value, which has evolved in recent years. The company has continued to modify and diversify its business to align with changes in the industry and has emerged successfully over the past decade. Strong Medicaid and Medicare activities also contributed to this increase. Anthem continually takes several steps to improve its Medicare and Medicaid businesses to provide affordable, value-based medical care to the communities it serves.
The company has always grown through buyouts. The acquisitions of WellCare Health’s Missouri and Nebraska Medicaid plans in January 2020 added approximately 300,000 Medicaid members to its coverage. Its takeover of Beacon Health, the country’s largest independent behavioral health organization, is expected to strengthen its position in the space. Anthem also bought AmeriBen, which helped it increase the number of commercial and specialty listings.
The health insurance company has finalized the takeover of Puerto Rico-based subsidiaries, including MMM Holdings. In the second quarter of 2021, Anthem purchased myNEXUS, Inc., a home care nursing management company for payers. The acquisition is expected to provide better home health care facilities, which in turn will lead to better health outcomes for individuals.
The growing number of company members is also impressive. Last year, its medical workforce grew 4.7% year-over-year to 42.9 million members thanks to robust organic growth. As of June 30, 2021, the same figure had climbed 4.4% year-on-year to 44.3 million members. For 2021, the number of medical members is expected to be between 44.8 and 45.3 million, the midpoint of which indicates a rise of 5% from the figure published in 2020.
Thanks to its generous cash flow, the company has been able to deploy its capital efficiently for many years now. It started paying cash dividends in early 2011 and has steadily increased its dividend since. The share buyback activity resumed last June, given the solid solvency of the company. In the first half of 2021, Anthem repurchased shares for $ 927 million. The company plans to repurchase shares worth $ 1.6 billion by 2021 and around 60% of the target has already been met.
All of this has led to a healthy source of income. The company experienced a 9% CAGR during the 2015-2020 forecast period. In the first six months of 2021, revenue grew 11.5% year-over-year on better premium income, attributable to its strong Medicaid and Medicare businesses. For 2021, operating revenue is forecast at $ 137.1 billion, encompassing premium income of $ 116.5 to $ 117.5 billion. The newly provided guided range is not only higher than the previous projection of $ 135.1 billion, but its midpoint also implies a 13.5% rise from the figure released in 2020.
The consensus mark for 2021 earnings stands at $ 25.63, which indicates a 14.01% increase from the figure released a year ago.
The company’s shares have gained 27.5% in the past year, outpacing its industry growth of 17.2%. You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.
Image source: Zacks Investment Research
Other companies in the same space, like The joint company. (JYNT – Free report), Molina Health, Inc. (Ministry of Health – Free report) and UnitedHealth Group Incorporated (A H – Free Report) also increased by 413.7%, 32.7% and 21.7%, respectively, during the same period.