We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Anthem's (ANTM) Notes Receive Rating Action From A.M Best
Read MoreHide Full Article
Anthem Inc. recently received rating action on its senior unsecured notes from A.M Best. The rating giant has assigned Long-Term Issue Credit Ratings of “bbb+” to Anthem’s $900 million 2.5% notes due 2020, $750 million 2.95% notes due 2022, $850 million 3.35% notes due 2024, $1.6 billion 3.65% notes due 2027 and $1.4 billion 4.375% notes due 2047. The outlook for these Credit Ratings has remained stable.
The rating giant believes that Anthem will use the proceeds from this offering for the tender offer announced on Nov 14, 2017, to pay its debt obligations that includes a debt maturity in January 2018. The proceeds will also be used to finance the upcoming acquisitions of HealthSun and America’s 1st Choice to be completed in the fourth quarter of 2017 and the first quarter of 2018, respectively.
According to A.M. Best, these notes issuances are likely to increase Anthem’s financial leverage to 45% or below compared with the present level of 38%. The rating giant expects the level to moderate with time. However, the issue regarding the terminated merger between Anthem and Cigna Corp (CI - Free Report) that involved a break-up fee of $1.85 billion is still not resolved. The leverage estimates do not include the possibility of the payment of this break-up fee.
In a year’s time, its shares have gained 57.7%, outperforming the industry’s rally of 40.5%
Anthem has been continuously delivering solid operating earnings on the back of revenue growth. Sufficient generation of cash flows has provided it with strong liquidity as well. Its profitability has been mainly driven by its Commercial business, partially offset by a lower margin in its government business and challenges faced in Individual business.
Moreover, the upcoming acquisitions of HealthSun and America’s 1st Choice are likely to add nearly 170,000 Medicare Advantage members to Anthem’s existing Simply Healthcare Medicare Advantage and Amerigroup Managed Medicaid membership. Also, the addition of HealthSun’s primary care and specialty centers, along with their vast network of medical centers and care delivery capabilities are likely to boost Anthem’s enrollment in Florida.
Some better-ranked stocks in the industry are Centene Corp (CNC - Free Report) and The Joint Corp (JYNT - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).
Centene is a well diversified, multi-national healthcare company that also delivered positive surprises in each of the last four quarters with an average beat of 10.6%. Shares of Centene have gained 65.7% in a year’s time, outperforming the industry.
Joint Corp develops, owns, operates, franchises, supports and manages chiropractic clinics in the United States. The company has delivered positive surprises in three of the last four quarters with an average beat of 5.5%. Shares of the company have rallied 135% in a year’s time, outperforming the industry.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Image: Bigstock
Anthem's (ANTM) Notes Receive Rating Action From A.M Best
Anthem Inc. recently received rating action on its senior unsecured notes from A.M Best. The rating giant has assigned Long-Term Issue Credit Ratings of “bbb+” to Anthem’s $900 million 2.5% notes due 2020, $750 million 2.95% notes due 2022, $850 million 3.35% notes due 2024, $1.6 billion 3.65% notes due 2027 and $1.4 billion 4.375% notes due 2047. The outlook for these Credit Ratings has remained stable.
The rating giant believes that Anthem will use the proceeds from this offering for the tender offer announced on Nov 14, 2017, to pay its debt obligations that includes a debt maturity in January 2018. The proceeds will also be used to finance the upcoming acquisitions of HealthSun and America’s 1st Choice to be completed in the fourth quarter of 2017 and the first quarter of 2018, respectively.
According to A.M. Best, these notes issuances are likely to increase Anthem’s financial leverage to 45% or below compared with the present level of 38%. The rating giant expects the level to moderate with time. However, the issue regarding the terminated merger between Anthem and Cigna Corp (CI - Free Report) that involved a break-up fee of $1.85 billion is still not resolved. The leverage estimates do not include the possibility of the payment of this break-up fee.
In a year’s time, its shares have gained 57.7%, outperforming the industry’s rally of 40.5%
Anthem has been continuously delivering solid operating earnings on the back of revenue growth. Sufficient generation of cash flows has provided it with strong liquidity as well. Its profitability has been mainly driven by its Commercial business, partially offset by a lower margin in its government business and challenges faced in Individual business.
Moreover, the upcoming acquisitions of HealthSun and America’s 1st Choice are likely to add nearly 170,000 Medicare Advantage members to Anthem’s existing Simply Healthcare Medicare Advantage and Amerigroup Managed Medicaid membership. Also, the addition of HealthSun’s primary care and specialty centers, along with their vast network of medical centers and care delivery capabilities are likely to boost Anthem’s enrollment in Florida.
Zacks Rank & Stocks to Consider
Anthem presently carries Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the industry are Centene Corp (CNC - Free Report) and The Joint Corp (JYNT - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).
Centene is a well diversified, multi-national healthcare company that also delivered positive surprises in each of the last four quarters with an average beat of 10.6%. Shares of Centene have gained 65.7% in a year’s time, outperforming the industry.
Joint Corp develops, owns, operates, franchises, supports and manages chiropractic clinics in the United States. The company has delivered positive surprises in three of the last four quarters with an average beat of 5.5%. Shares of the company have rallied 135% in a year’s time, outperforming the industry.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>