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Zacks Investment Ideas feature highlights: Elevance Health, McKesson and Humana
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For Immediate Release
Chicago, IL – October 26, 2022 – Today, Zacks Investment Ideas feature highlights Elevance Health (ELV - Free Report) , McKesson Corp. (MCK - Free Report) and Humana (HUM - Free Report) .
3 Top-Ranked Medical Stocks Lapping the S&P 500
The Zacks Medical sector has been relatively strong over the last month, climbing nearly 5% vs. the S&P 500's ascent of 4%.
Additionally, the sector is currently ranked #2 out of all 16 Zacks sectors, telling us that stocks within have been witnessing favorable earnings estimate revisions.
After all, since a sector is nothing more than a group of stocks in a similar business, utilizing the Zacks Sector Rank is the perfect way to see which areas currently look more promising than others.
For those looking to tap into the relative strength, three top-ranked stocks – Elevance Health, McKesson Corp. and Humana– could all be considered.
Let's take a deeper dive into each one.
McKesson Corp.
McKesson Corp. is a healthcare services and information technology company operating through two segments: Distribution Solutions and Technology Solutions. The company currently sports a Zacks Rank #2 (Buy).
MCK has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate in nine of its last ten quarters. Revenue results have also consistently been better than expected, with MCK chaining together five consecutive top-line beats.
Further, the company rewards its shareholders with a small dividend; MCK's annual dividend yields 0.6% paired with a sustainable payout ratio sitting at just 8% of earnings.
The company has upped its dividend five times over the last five years, translating to a respectable 7.8% five-year annualized dividend growth rate.
McKesson has witnessed favorable growth trends as well – in its latest quarter, revenue from its U.S. Pharmaceutical and Specialty Solutions (80% of net revenues in FY22) came in at $56.9 billion, reflecting a 14% Y/Y uptick and easily beating the Zacks Consensus Estimate of $52.7 billion.
Humana
Humana is a health care plan provider in the United States, providing health insurance benefits under Health Maintenance Organization, Private Fee-For-Service, and Preferred Provider Organization plans.
Humana's earnings outlook has turned bright over the last several months, helping land the stock into a favorable Zacks Rank #2 (Buy).
The company carries a favorable growth profile, with earnings forecasted to climb 21% in its current fiscal year (FY22) and a further 12% in FY23.
The projected earnings growth comes on top of forecasted Y/Y revenue upticks of 12% and 9% in FY22 and FY23, respectively.
Like MCK, Humana pays a small dividend; HUM's annual dividend yield comes in at 0.6%, visibly lower than its Zacks Medical sector average.
Still, the company's 23.5% five-year annualized dividend growth rate helps to pick up the slack.
The company's retail segment (66% of FY21 revenue) raked in $20.9 billion in its latest quarter, good enough for a 13% Y/Y uptick and to beat the Zacks Consensus Estimate of $20.4 billion by 2%.
Elevance Health
Elevance Health Inc. operates as a health benefits company, supporting consumers, families, and communities across the entire care journey to lead healthier lives.
ELV has found success as of late within its earnings releases, exceeding both top and bottom-line estimates in back-to-back quarters. In its latest print, the company registered a 6% EPS beat paired with a 1.3% revenue beat.
Elevance Health is forecasted to grow at a solid pace – earnings are forecasted to climb 11% in its current fiscal year (FY22) and a further 13% in FY23.
ELV's Government Business segment (roughly 53% of FY21 revenue) grew 15% Y/Y and raked in $23.8 billion in its latest quarter thanks to the rise in Medicaid membership and higher premium rates of Medicare.
Bottom Line
The Zacks Medical sector has been relatively strong over the last month, outperforming the S&P 500 modestly. Currently, it ranks #2 out of all 16 Zacks sectors.
By focusing on companies in a highly-ranked Zacks sector, we can easily find groups of stocks with a brighter near-term earnings outlook than others.
All three stocks above reside in the sector and carry a favorable Zacks Rank, undoubtedly a rock-solid pairing.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: Elevance Health, McKesson and Humana
For Immediate Release
Chicago, IL – October 26, 2022 – Today, Zacks Investment Ideas feature highlights Elevance Health (ELV - Free Report) , McKesson Corp. (MCK - Free Report) and Humana (HUM - Free Report) .
3 Top-Ranked Medical Stocks Lapping the S&P 500
The Zacks Medical sector has been relatively strong over the last month, climbing nearly 5% vs. the S&P 500's ascent of 4%.
Additionally, the sector is currently ranked #2 out of all 16 Zacks sectors, telling us that stocks within have been witnessing favorable earnings estimate revisions.
After all, since a sector is nothing more than a group of stocks in a similar business, utilizing the Zacks Sector Rank is the perfect way to see which areas currently look more promising than others.
For those looking to tap into the relative strength, three top-ranked stocks – Elevance Health, McKesson Corp. and Humana– could all be considered.
Let's take a deeper dive into each one.
McKesson Corp.
McKesson Corp. is a healthcare services and information technology company operating through two segments: Distribution Solutions and Technology Solutions. The company currently sports a Zacks Rank #2 (Buy).
MCK has a strong earnings track record, exceeding the Zacks Consensus EPS Estimate in nine of its last ten quarters. Revenue results have also consistently been better than expected, with MCK chaining together five consecutive top-line beats.
Further, the company rewards its shareholders with a small dividend; MCK's annual dividend yields 0.6% paired with a sustainable payout ratio sitting at just 8% of earnings.
The company has upped its dividend five times over the last five years, translating to a respectable 7.8% five-year annualized dividend growth rate.
McKesson has witnessed favorable growth trends as well – in its latest quarter, revenue from its U.S. Pharmaceutical and Specialty Solutions (80% of net revenues in FY22) came in at $56.9 billion, reflecting a 14% Y/Y uptick and easily beating the Zacks Consensus Estimate of $52.7 billion.
Humana
Humana is a health care plan provider in the United States, providing health insurance benefits under Health Maintenance Organization, Private Fee-For-Service, and Preferred Provider Organization plans.
Humana's earnings outlook has turned bright over the last several months, helping land the stock into a favorable Zacks Rank #2 (Buy).
The company carries a favorable growth profile, with earnings forecasted to climb 21% in its current fiscal year (FY22) and a further 12% in FY23.
The projected earnings growth comes on top of forecasted Y/Y revenue upticks of 12% and 9% in FY22 and FY23, respectively.
Like MCK, Humana pays a small dividend; HUM's annual dividend yield comes in at 0.6%, visibly lower than its Zacks Medical sector average.
Still, the company's 23.5% five-year annualized dividend growth rate helps to pick up the slack.
The company's retail segment (66% of FY21 revenue) raked in $20.9 billion in its latest quarter, good enough for a 13% Y/Y uptick and to beat the Zacks Consensus Estimate of $20.4 billion by 2%.
Elevance Health
Elevance Health Inc. operates as a health benefits company, supporting consumers, families, and communities across the entire care journey to lead healthier lives.
ELV has found success as of late within its earnings releases, exceeding both top and bottom-line estimates in back-to-back quarters. In its latest print, the company registered a 6% EPS beat paired with a 1.3% revenue beat.
Elevance Health is forecasted to grow at a solid pace – earnings are forecasted to climb 11% in its current fiscal year (FY22) and a further 13% in FY23.
ELV's Government Business segment (roughly 53% of FY21 revenue) grew 15% Y/Y and raked in $23.8 billion in its latest quarter thanks to the rise in Medicaid membership and higher premium rates of Medicare.
Bottom Line
The Zacks Medical sector has been relatively strong over the last month, outperforming the S&P 500 modestly. Currently, it ranks #2 out of all 16 Zacks sectors.
By focusing on companies in a highly-ranked Zacks sector, we can easily find groups of stocks with a brighter near-term earnings outlook than others.
All three stocks above reside in the sector and carry a favorable Zacks Rank, undoubtedly a rock-solid pairing.
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.