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Why Holding Centene (CNC) in Your Portfolio is a Smart Move
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Centene Corporation (CNC - Free Report) remains in investors’ good books owing to a solid portfolio, strategic measures and a growing customer base. The leading health insurer consistently gains from its Medicaid and Medicare businesses.
CNC proved itself time and again with its unique range of products that goes beyond traditional insurance. Over the past 30 days, the stock has witnessed its 2023 earnings estimate move 0.2% north.
The stock has gained 36% over a year compared with the industry’s rally of 33.6%. Yet, the Zacks Medical sector has lost 14.9% in the said time frame. The S&P 500 composite has risen 13.5% in the same period.
CNC 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. With a market capitalization of $51.28 billion, CNC is thriving with prospects.
Now delve deeper to see what makes this currently Zacks Rank #3 (Hold) player an investor favorite stock.
CNC is a dynamic stock and leaves no stone unturned to boost its portfolio. Centene makes use of its value-based care model, innovative technologies and provider collaborations for extending cost-effective healthcare services and programs throughout the United States.
Since 2002, CNC has been witnessing significant revenue growth. In the 2015-2020 period, CNC witnessed a CAGR of 37.3%. In 2021, its top line increased to $126 billion owing to Medicaid membership on the back of the ongoing suspension of eligibility redeterminations, membership growth in Medicare business, buyouts of PANTHERx and Circle Health in 2021, and the commencement of certain contracts. Recently, Centene won contracts from the Indiana Department of Administration and the Louisiana Department of Health.
The M&A activity is a major growth driver at CNC. Major buyouts in the past like that of WellCare in January 2020 helped Centene bolster its membership largely. In December 2020, CNC acquired PANTHERx, one of the largest and the fastest-growing specialty pharmacies in the United States.
This acquisition solidifies Centene’s foothold in the booming specialty drug market. The leading insurer also bought Magellan Health that will strengthen its position in the said space. All these initiatives poise CNC well for growth and help it solidify its position in the market.
The Medicaid business of Centene remains well-poised for growth on the back of continued program expansions across several states, thereby increasing membership.
In Medicare, CNC ended the year with more than 1.2 million members across 33 states. On its last earnings call, management said that it expects to offer plans in 327 new counties and three new states in 2022.
Concurrent with fourth-quarter 2021 results, management rolled out its 2022 outlook. It projects revenues within $135.9-$137.9 billion, suggesting an increase from the 2021 level of $126 billion.
Adjusted EPS is anticipated to be $5.30-$5.50, indicating an improvement from $5.15 reported in 2021.
The Zacks Consensus Estimate for Centene’s 2022 earnings suggests growth of 5.4%, while the same for revenues indicates an improvement of 8.55% from the corresponding year-ago reported figures.
Stocks to Consider
Some better-ranked stocks in the medical space are Mednax, Inc. (MD - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and AmerisourceBergen Corporation . While Mednax sports a Zacks Rank #1 (Strong Buy), Ensign Group and AmerisourceBergen carry a Zacks Rank #2 (Buy) at present.
Mednax’s earnings surpassed estimates in each of the last four quarters, the average being 27.99%. The Zacks Consensus Estimate for MD’s 2022 earnings suggests an improvement of 12.9%, while the same for revenues suggests growth of 4.2% from the respective year-ago reported figures. The consensus mark for Mednax’s 2022 earnings has moved 7% north in the past 30 days.
The bottom line of Ensign Group outpaced estimates in each of the last four quarters, the average being 1.72%. The Zacks Consensus Estimate for ENSG’s 2022 earnings suggests an improvement of 11.8%, while the same for revenues suggests growth of 12.1% from the respective year-ago reported figures. The consensus mark for 2022 earnings has moved 3.6% north in the past 60 days. Ensign Group has a VGM Score of A.
AmerisourceBergen delivered a trailing four-quarter earnings surprise of 2.29%, on average. The Zacks Consensus Estimate for ABC’s 2022 earnings indicates a rise of 16.5% from the year-ago reported figure. The consensus mark has moved 1% north in the past 60 days. ABC has a VGM Score of A.
Shares of Mednax and Ensign Group have lost 11.3% and 4.1%, respectively, in a year, while the stock of AmerisourceBergen has gained 30.6%.
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Why Holding Centene (CNC) in Your Portfolio is a Smart Move
Centene Corporation (CNC - Free Report) remains in investors’ good books owing to a solid portfolio, strategic measures and a growing customer base. The leading health insurer consistently gains from its Medicaid and Medicare businesses.
CNC proved itself time and again with its unique range of products that goes beyond traditional insurance. Over the past 30 days, the stock has witnessed its 2023 earnings estimate move 0.2% north.
The stock has gained 36% over a year compared with the industry’s rally of 33.6%. Yet, the Zacks Medical sector has lost 14.9% in the said time frame. The S&P 500 composite has risen 13.5% in the same period.
Image Source: Zacks Investment Research
CNC carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CNC 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. With a market capitalization of $51.28 billion, CNC is thriving with prospects.
Now delve deeper to see what makes this currently Zacks Rank #3 (Hold) player an investor favorite stock.
CNC is a dynamic stock and leaves no stone unturned to boost its portfolio.
Centene makes use of its value-based care model, innovative technologies and provider collaborations for extending cost-effective healthcare services and programs throughout the United States.
Since 2002, CNC has been witnessing significant revenue growth. In the 2015-2020 period, CNC witnessed a CAGR of 37.3%. In 2021, its top line increased to $126 billion owing to Medicaid membership on the back of the ongoing suspension of eligibility redeterminations, membership growth in Medicare business, buyouts of PANTHERx and Circle Health in 2021, and the commencement of certain contracts. Recently, Centene won contracts from the Indiana Department of Administration and the Louisiana Department of Health.
The M&A activity is a major growth driver at CNC. Major buyouts in the past like that of WellCare in January 2020 helped Centene bolster its membership largely. In December 2020, CNC acquired PANTHERx, one of the largest and the fastest-growing specialty pharmacies in the United States.
This acquisition solidifies Centene’s foothold in the booming specialty drug market. The leading insurer also bought Magellan Health that will strengthen its position in the said space. All these initiatives poise CNC well for growth and help it solidify its position in the market.
The Medicaid business of Centene remains well-poised for growth on the back of continued program expansions across several states, thereby increasing membership.
In Medicare, CNC ended the year with more than 1.2 million members across 33 states. On its last earnings call, management said that it expects to offer plans in 327 new counties and three new states in 2022.
Concurrent with fourth-quarter 2021 results, management rolled out its 2022 outlook. It projects revenues within $135.9-$137.9 billion, suggesting an increase from the 2021 level of $126 billion.
Adjusted EPS is anticipated to be $5.30-$5.50, indicating an improvement from $5.15 reported in 2021.
The Zacks Consensus Estimate for Centene’s 2022 earnings suggests growth of 5.4%, while the same for revenues indicates an improvement of 8.55% from the corresponding year-ago reported figures.
Stocks to Consider
Some better-ranked stocks in the medical space are Mednax, Inc. (MD - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and AmerisourceBergen Corporation . While Mednax sports a Zacks Rank #1 (Strong Buy), Ensign Group and AmerisourceBergen carry a Zacks Rank #2 (Buy) at present.
Mednax’s earnings surpassed estimates in each of the last four quarters, the average being 27.99%. The Zacks Consensus Estimate for MD’s 2022 earnings suggests an improvement of 12.9%, while the same for revenues suggests growth of 4.2% from the respective year-ago reported figures. The consensus mark for Mednax’s 2022 earnings has moved 7% north in the past 30 days.
The bottom line of Ensign Group outpaced estimates in each of the last four quarters, the average being 1.72%. The Zacks Consensus Estimate for ENSG’s 2022 earnings suggests an improvement of 11.8%, while the same for revenues suggests growth of 12.1% from the respective year-ago reported figures. The consensus mark for 2022 earnings has moved 3.6% north in the past 60 days. Ensign Group has a VGM Score of A.
AmerisourceBergen delivered a trailing four-quarter earnings surprise of 2.29%, on average. The Zacks Consensus Estimate for ABC’s 2022 earnings indicates a rise of 16.5% from the year-ago reported figure. The consensus mark has moved 1% north in the past 60 days. ABC has a VGM Score of A.
Shares of Mednax and Ensign Group have lost 11.3% and 4.1%, respectively, in a year, while the stock of AmerisourceBergen has gained 30.6%.