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If You Invested $1000 in Elevance Health a Decade Ago, This is How Much It'd Be Worth Now

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Elevance Health (ELV - Free Report) ten years ago? It may not have been easy to hold on to ELV for all that time, but if you did, how much would your investment be worth today?

Elevance Health's Business In-Depth

With that in mind, let's take a look at Elevance Health's main business drivers.

Based in Indianapolis, IN, Elevance Health is one of the largest publicly traded health insurers in the United States, in terms of membership. The company was previously named Anthem, Inc. Effective Jun 27, 2022, the corporate name was changed to Elevance Health and began trading under the ticker “ELV” on Jun 28.

The company is an independent licensee of the Blue Cross Blue Shield Association (BCBSA). Medical membership of Elevance Health as of Dec 31, 2023, totaled 47 million. With the latest name change the company announced a rejig of its brand portfolio. The company is expected to organize its brand portfolio into Anthem Blue Cross/Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon core go-to-market brands. The company markets its products through agents, brokers and retail partnerships.
Elevance Health currently operates through three reportable segments:
Health Benefits (aggregation of the previously known Commercial & Specialty Business and Government Business), Carelon (includes CarelonRx and Carelon Services), and Corporate & Other.
Health Benefits (generated 87.3% of 2023 total operating revenues) now encompasses group risk-based and fee-based, Individual and BlueCard businesses. It offers administrative managed care services to fee-based clients. Furthermore, this unit offers products like vision, dental, life, disability and supplemental health insurance benefits. Also, the segment consists of Medicaid, Medicare businesses and National Government Services.

Carelon (28.2%) comprises CarelonRx (previously IngenioRx) and Carelon Services (previously Diversified Business Group). The healthcare services brand Carelon was launched in June 2022 as part of ELV’s rebranding process. CarelonRx markets and offers PBM services to health plan clients as well as external customers. The PBM service portfolio incorporates services like pharmacy networks, formulary management, prescription drug database, member services and others.

Corporate & Other (0.3%) comprises businesses that cannot meet the quantitative threshold of other segments. It also includes corporate expenses which cannot be allocated to other segments.

(The total percentage of the segments' operating revenues will not be equal to 100% due to eliminations.)

Bottom Line

Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Elevance Health, if you bought shares a decade ago, you're likely feeling really good about your investment today.

According to our calculations, a $1000 investment made in May 2014 would be worth $5,250.10, or a gain of 425.01%, as of May 1, 2024, and this return excludes dividends but includes price increases.

The S&P 500 rose 167.29% and the price of gold increased 71.14% over the same time frame in comparison.

Going forward, analysts are expecting more upside for ELV.

Elevance Health's revenue growth, fueled by premium rate increases and rising memberships, contributes to its positive trajectory. Strategic acquisitions and partnerships have fortified its business portfolio. Notably, a robust Medicare Advantage segment, combined with successful contract acquisitions, is poised to drive future memberships. It increased the 2024 earnings guidance to $37.20 per share, compared with previous year’s $33.14 figure. The Carelon business is a key contributor to its success. It utilizes excess capital to boost shareholder value. Its shares have outperformed the industry in the past year. However, its rising expenses continue to put pressure on margins. Its high balance sheet debt is reducing financial flexibility. Also, its declining free cash flow is a concern. As such, the stock warrants a cautious stance.

The stock is up 5.88% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2024. The consensus estimate has moved up as well.

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