We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
CVS or Cigna: Which Diversified Healthcare Stock Should You Own Now?
Read MoreHide Full Article
CVS Health (CVS - Free Report) and The Cigna Group (CI - Free Report) stand as two dominant forces in the U.S. diversified healthcare sector, commanding market capitalizations of approximately $77 billion and $84 billion, respectively. Both companies have strategically integrated pharmacy benefit management, insurance coverage and care delivery into comprehensive, consumer-focused platforms designed to address the complexities of modern healthcare.
As the industry faces intensifying policy challenges, rapid growth in GLP-1 therapies and a pressing need for digital transformation, a critical question emerges for investors i.e. which of these healthcare leaders is better positioned to sustain long-term growth and deliver value in an increasingly dynamic market environment? Let's find out.
CVS Stock is an Outperformer Compared to CI & S&P 500
Year to date, CVS Health shares have surged 39.7%, significantly outpacing both Cigna’s 14.7% gain and the S&P 500’s 1.3% decline. CVS’ strong stock performance reflects growing investor confidence in the company’s turnaround strategy and execution under its revamped leadership team. Key drivers include the successful stabilization of its Aetna segment, better-than-expected first-quarter earnings, and a raised full-year EPS guidance. This sharp rebound has helped CVS Health become one of the top-performing stocks in the S&P 500 in 2025, signaling renewed momentum in its long-term growth narrative.
Image Source: Silkcharts
Meanwhile, Cigna stock’s gain reflects the strong performance of the Evernorth Health Services segment, driven by specialty pharmacy, biosimilars and pharmacy benefit services. The divestiture of its Medicare businesses to HCSC has sharpened its focus on higher-margin commercial insurance and health services. Cigna's leadership in GLP-1 affordability, through initiatives like EncircleRx and the upcoming EnGuide platform, further enhances its positioning.
While trailing CVS Health in near-term gains, Cigna’s disciplined capital strategy and 10-14% long-term EPS growth target continue to appeal to long-term investors.
Image Source: Zacks Investment Research
Diverging Paths, Long-Term Prospects of CVS & CI
CVS Health and Cigna are executing distinct strategies for long-term growth, shaped by structural strengths and market positioning.
CVS Health is leveraging its integrated ecosystem with 1.7 billion scripts filled each year and 9,000 community health locations to drive care coordination and cost-efficiency. Its strong first-quarter 2025 results (EPS grew 71.8% year over year and exceeded the Zacks Consensus Estimate by 34.7%, while adjusted operating income surged 54.8%) and raised full-year guidance signal resilience after a tough 2024. Its pivot to core segments like Medicare Advantage and divestiture of ACA exchange plans are aimed at streamlining profitability. However, regulatory friction and GLP-1 utilization trends pose near-term risks.
Adjusted EPS: CVS
Image Source: Zacks Investment Research
Cigna’s first-quarter 2025 results, on the other hand, showed adjusted EPS growth of more than 15% year over year and $1.9 billion in shareholder returns, supported by 8% revenue growth in Evernorth and 9% membership growth in Cigna Healthcare. The recent Medicare Advantage divestiture aims to streamline operations and enhance focus on the employer market and specialty pharmacy. Cigna’s EncircleRx and EnGuide platforms aim to reduce GLP-1 therapy costs and improve adherence, anchoring its future in value-based care and outcomes-driven models.
Overall, with a long-term EPS growth target of 10-14% and strong capital discipline, Cigna offers a more defensive yet reliable growth path. CVS delivers broader, tech-enabled integration with higher volatility, while Cigna provides focused, service-led predictability with strong capital returns.
Adjusted EPS: CI
Image Source: Zacks Investment Research
Valuation Throws Mixed Signals
CVS is trading at a trailing 12-month price-to-earnings, a commonly used multiple for valuing healthcare stocks, of 9.65X, above its 5-year median of 9.55X. Meanwhile, Cigna is presently trading at a trailing 12-month price-to-earnings of 11.42X, which is below its 5-year median of 12.06X but above CVS’ P/E.
This suggests that while CI’s valuation may appear quite elevated relative to CVS, it remains attractively valued when compared with its own historical average.
Image Source: Zacks Investment Research
Final Take: Buy CVS Now
As a Zacks Rank #2 (Buy) stock, CVS is showing strong momentum with a 39.7% year-to-date gain, driven by strong first-quarter earnings, portfolio realignment and renewed strategic focus. Its expansive care delivery network, AI-powered efficiencies and focus on high-growth areas like Medicare Advantage position it to capitalize on healthcare’s vertical integration trend. While near-term regulatory risks remain, the stock’s modest valuation and earnings growth visibility offer an attractive entry point.
Cigna, though fundamentally solid with a Zacks Rank #3 (Hold), presents a more defensive profile, emphasizing service-led stability over aggressive expansion. For investors seeking upside potential with improving fundamentals, CVS offers a stronger case for investment at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
CVS or Cigna: Which Diversified Healthcare Stock Should You Own Now?
CVS Health (CVS - Free Report) and The Cigna Group (CI - Free Report) stand as two dominant forces in the U.S. diversified healthcare sector, commanding market capitalizations of approximately $77 billion and $84 billion, respectively. Both companies have strategically integrated pharmacy benefit management, insurance coverage and care delivery into comprehensive, consumer-focused platforms designed to address the complexities of modern healthcare.
As the industry faces intensifying policy challenges, rapid growth in GLP-1 therapies and a pressing need for digital transformation, a critical question emerges for investors i.e. which of these healthcare leaders is better positioned to sustain long-term growth and deliver value in an increasingly dynamic market environment? Let's find out.
CVS Stock is an Outperformer Compared to CI & S&P 500
Year to date, CVS Health shares have surged 39.7%, significantly outpacing both Cigna’s 14.7% gain and the S&P 500’s 1.3% decline. CVS’ strong stock performance reflects growing investor confidence in the company’s turnaround strategy and execution under its revamped leadership team. Key drivers include the successful stabilization of its Aetna segment, better-than-expected first-quarter earnings, and a raised full-year EPS guidance. This sharp rebound has helped CVS Health become one of the top-performing stocks in the S&P 500 in 2025, signaling renewed momentum in its long-term growth narrative.
Image Source: Silkcharts
Meanwhile, Cigna stock’s gain reflects the strong performance of the Evernorth Health Services segment, driven by specialty pharmacy, biosimilars and pharmacy benefit services. The divestiture of its Medicare businesses to HCSC has sharpened its focus on higher-margin commercial insurance and health services. Cigna's leadership in GLP-1 affordability, through initiatives like EncircleRx and the upcoming EnGuide platform, further enhances its positioning.
While trailing CVS Health in near-term gains, Cigna’s disciplined capital strategy and 10-14% long-term EPS growth target continue to appeal to long-term investors.
Image Source: Zacks Investment Research
Diverging Paths, Long-Term Prospects of CVS & CI
CVS Health and Cigna are executing distinct strategies for long-term growth, shaped by structural strengths and market positioning.
CVS Health is leveraging its integrated ecosystem with 1.7 billion scripts filled each year and 9,000 community health locations to drive care coordination and cost-efficiency. Its strong first-quarter 2025 results (EPS grew 71.8% year over year and exceeded the Zacks Consensus Estimate by 34.7%, while adjusted operating income surged 54.8%) and raised full-year guidance signal resilience after a tough 2024. Its pivot to core segments like Medicare Advantage and divestiture of ACA exchange plans are aimed at streamlining profitability. However, regulatory friction and GLP-1 utilization trends pose near-term risks.
Adjusted EPS: CVS
Image Source: Zacks Investment Research
Cigna’s first-quarter 2025 results, on the other hand, showed adjusted EPS growth of more than 15% year over year and $1.9 billion in shareholder returns, supported by 8% revenue growth in Evernorth and 9% membership growth in Cigna Healthcare. The recent Medicare Advantage divestiture aims to streamline operations and enhance focus on the employer market and specialty pharmacy. Cigna’s EncircleRx and EnGuide platforms aim to reduce GLP-1 therapy costs and improve adherence, anchoring its future in value-based care and outcomes-driven models.
Overall, with a long-term EPS growth target of 10-14% and strong capital discipline, Cigna offers a more defensive yet reliable growth path. CVS delivers broader, tech-enabled integration with higher volatility, while Cigna provides focused, service-led predictability with strong capital returns.
Adjusted EPS: CI
Image Source: Zacks Investment Research
Valuation Throws Mixed Signals
CVS is trading at a trailing 12-month price-to-earnings, a commonly used multiple for valuing healthcare stocks, of 9.65X, above its 5-year median of 9.55X. Meanwhile, Cigna is presently trading at a trailing 12-month price-to-earnings of 11.42X, which is below its 5-year median of 12.06X but above CVS’ P/E.
This suggests that while CI’s valuation may appear quite elevated relative to CVS, it remains attractively valued when compared with its own historical average.
Image Source: Zacks Investment Research
Final Take: Buy CVS Now
As a Zacks Rank #2 (Buy) stock, CVS is showing strong momentum with a 39.7% year-to-date gain, driven by strong first-quarter earnings, portfolio realignment and renewed strategic focus. Its expansive care delivery network, AI-powered efficiencies and focus on high-growth areas like Medicare Advantage position it to capitalize on healthcare’s vertical integration trend. While near-term regulatory risks remain, the stock’s modest valuation and earnings growth visibility offer an attractive entry point.
Cigna, though fundamentally solid with a Zacks Rank #3 (Hold), presents a more defensive profile, emphasizing service-led stability over aggressive expansion. For investors seeking upside potential with improving fundamentals, CVS offers a stronger case for investment at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.