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5 Solid Reasons to Invest in Anthem for Portfolio Boost
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Estimates for Anthem, Inc. have been revised upward over the past 30 days, reflecting analysts' optimism on the stock. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings move 0.60% and 1.12% north, respectively.
Shares of this Zacks Rank #2 (Buy) company have rallied 34.7% in the past year, almost in line with the industry’s growth of 33.8%. The company is well-poised for growth, which is also apparent from its Value Scoreof A. Our research shows that stocks with a Value Style Score of A or B when combined with a bullish Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the value investment space.
Now, let’s focus on some important factors that make Anthem stock an investor favorite.
Positive Earnings Surprise History: The company boasts an encouraging earnings surprise history with an average trailing four-quarter beat of 6.65%. This highlights the company’s operational excellence.
Growing Membership: The company's membership has been significantly rising over the past few years. Continuing the momentum, Medicare enrollment was higher in the first half of 2018 by 17.1% year over year, majorly driven by acquisitions and organic growth.
Although Medical membership dipped 0.6% year over year in the first six months of 2018, it was partially offset by growth in the company's Medicare enrollment.
Raised 2018 Guidance: The company lifted its 2018 guidance during the second quarter. It expects its adjusted net income per share to be more than $15.40, a 28% rise from the level in 2017 and up from the prior projection of more than $15.30. It has also upped its investment income outlook by $75 million, mainly driven by better short-term interest rate yields, partially offset by share count and tax rate adjustments. This should instill investors’ confidence in the stock.
Valuation: Shares of Anthem are underpriced at the moment, which remains attractive for investors. It has a trailing 12-month price-to-earnings ratio of 19.31, falling below the industry’s average of 21.56.
Capital Deployment: Anthem is known for its aggressive dividend payouts and continuous share repurchases, initiated in 2011. It has hiked its dividend by about 160% over the past five years. Continuing this trend, the company bought back shares worth $395 million and $400 million, respectively, in the first and second quarters of 2018. As of Mar 31, 2018, it had 6.8 billion shares remaining under its repurchase authorization.
Other Key Picks
Investors interested in the medical-HMO industry might also take a look at some other top-ranked stocks like WellCare Health Plans, Inc. , Triple-S Management Corporation and Humana Inc. (HUM - Free Report) .
WellCare provides managed care services for government-sponsored health care programs. The company holds a Zacks Rank # 2 and managed to pull off an average four-quarter positive surprise of 53.89%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Triple-S Management and its subsidiaries provide a portfolio of managed care and related products in the commercial, Medicare and Medicaid markets in Puerto Rico, the United States. It carries a Zacks Rank of 2 and managed to come up with a whopping four-quarter earnings surprise of 187.91%.
Humana operates as a health and well-being company in the United States. It has a Zacks Rank #3 (Hold) and delivered an average four-quarter beat of 3.96%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
5 Solid Reasons to Invest in Anthem for Portfolio Boost
Estimates for Anthem, Inc. have been revised upward over the past 30 days, reflecting analysts' optimism on the stock. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings move 0.60% and 1.12% north, respectively.
Shares of this Zacks Rank #2 (Buy) company have rallied 34.7% in the past year, almost in line with the industry’s growth of 33.8%. The company is well-poised for growth, which is also apparent from its Value Scoreof A. Our research shows that stocks with a Value Style Score of A or B when combined with a bullish Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the value investment space.
Now, let’s focus on some important factors that make Anthem stock an investor favorite.
Positive Earnings Surprise History: The company boasts an encouraging earnings surprise history with an average trailing four-quarter beat of 6.65%. This highlights the company’s operational excellence.
Growing Membership: The company's membership has been significantly rising over the past few years. Continuing the momentum, Medicare enrollment was higher in the first half of 2018 by 17.1% year over year, majorly driven by acquisitions and organic growth.
Although Medical membership dipped 0.6% year over year in the first six months of 2018, it was partially offset by growth in the company's Medicare enrollment.
Raised 2018 Guidance: The company lifted its 2018 guidance during the second quarter. It expects its adjusted net income per share to be more than $15.40, a 28% rise from the level in 2017 and up from the prior projection of more than $15.30. It has also upped its investment income outlook by $75 million, mainly driven by better short-term interest rate yields, partially offset by share count and tax rate adjustments. This should instill investors’ confidence in the stock.
Valuation: Shares of Anthem are underpriced at the moment, which remains attractive for investors. It has a trailing 12-month price-to-earnings ratio of 19.31, falling below the industry’s average of 21.56.
Capital Deployment: Anthem is known for its aggressive dividend payouts and continuous share repurchases, initiated in 2011. It has hiked its dividend by about 160% over the past five years. Continuing this trend, the company bought back shares worth $395 million and $400 million, respectively, in the first and second quarters of 2018. As of Mar 31, 2018, it had 6.8 billion shares remaining under its repurchase authorization.
Other Key Picks
Investors interested in the medical-HMO industry might also take a look at some other top-ranked stocks like WellCare Health Plans, Inc. , Triple-S Management Corporation and Humana Inc. (HUM - Free Report) .
WellCare provides managed care services for government-sponsored health care programs. The company holds a Zacks Rank # 2 and managed to pull off an average four-quarter positive surprise of 53.89%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Triple-S Management and its subsidiaries provide a portfolio of managed care and related products in the commercial, Medicare and Medicaid markets in Puerto Rico, the United States. It carries a Zacks Rank of 2 and managed to come up with a whopping four-quarter earnings surprise of 187.91%.
Humana operates as a health and well-being company in the United States. It has a Zacks Rank #3 (Hold) and delivered an average four-quarter beat of 3.96%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>