With the worst global pandemic since World War I, healthcare has been in the spotlight for the past year and a half. Hundreds of thousands of people have been hospitalized in the United States due to COVID or have required some kind of treatment, and health insurance covers these expensive bills, which most Americans could not pay out of pocket. .
The high demand for healthcare and the fear of the coronavirus have led to a sharp increase in membership registrations. With more premiums paid, more money lands on the balance sheets of major health insurance companies. When you add in the growing general health needs of older Americans, health insurance stocks seem like a worthwhile investment.
This was evident in the last quarter when health insurance companies performed very well. This strong demand for insurance is not expected to change anytime soon, so there is still plenty of room for gains for some health insurance companies. Hymn inc. (ANTM), UnitedHealth Group Inc. (A H) and Molina Healthcare Inc (Ministry of Health) are three creams among crop health insurance stocks to consider.
Hymn inc. (ANTM)
ANTM is one of the largest private health insurance organizations nationwide, providing medical benefits to approximately 44 million medical members. The company offers coverage plans sponsored by employers, individuals and the government. It is also the largest supplier of Blue Cross Blue Shield branded blanket, operating as a licensee for the Blue Cross Blue Shield Association in 14 states.
The company had a strong third quarter where profits exceeded estimates and rose 61.7% year over year. Growth was driven by an increase in Medicaid and Medicare revenues, as well as an increase in premium rates and an increase in memberships. Its pharmacy benefits manager, IngenioRx, also had a strong quarter due to growth in its integrated medical and pharmacy members.
A massive increase in virtual care services bodes well for the coming quarters. ANTM has an overall rating of A, which translates into a strong purchase rating in our POWR odds system. The company has a growth rating of A as analysts forecast earnings to grow 100.8% year-over-year in the current quarter. Its low valuation led to a Value Grade of B, as the stock has a forward P / E of 14.88.
We also provide Momentum, Stability, Feeling, and Quality ratings for ANTM, which you can find here. ANTM is ranked # 1 in the B-rated health insurance industry. For more prominent stocks in this industry, Click here.
UnitedHealth Group Inc. (A H)
UNH is the largest private health insurance provider in the United States, providing medical benefits to 48 million members in its US and international operations. As a leader in employer-sponsored, self-administered, government-backed insurance plans, the company has achieved massive stature in managed care.
In addition, its investments in its Optum franchises have created a titan of healthcare services, spanning everything from medical and pharmaceutical benefits to the provision of outpatient care and testing. Like ANTM, UNH also has a strong third quarter. Profits exceeded estimates and grew 28.8% year-over-year due to an increase in the number of people served through its community and senior offerings.
UNH has an overall rating of A and a strong purchase rating in our POWR rating system. The company has a growth rating of B, which makes sense as analysts expect earnings to grow 71% year-over-year in the current quarter. UNH also has a quality grade of B due to strong fundamentals. At the end of the most recent quarter, the company had $ 23.9 billion in cash compared to no short-term debt.
For the rest of the UNH scores (Value, Momentum, Stability and Feeling), Click here. UNH is ranked # 2 in the Medicare and Medicare industry.
Molina Health Inc (Ministry of Health)
The Department of Health offers health care plans focused on Medicaid-related solutions for low-income families and individuals. Its health plans are managed by a network of subsidiaries, each of which is approved as a health maintenance organization (HMO). In addition to its Health Plans segment, the company has a Medicaid Solutions segment that provides solutions to US state governments for their Medicaid management information systems.
In the third quarter, MOH saw its sales jump 40.2% year-on-year and exceed analysts’ expectations. Much of this growth is due to an increase in the number of memberships and higher premium income. The increase in membership came from securing contracts in its Medicare and Medicaid businesses. The Ministry of Health has also launched a restructuring program to improve its operational efficiency.
The company has an overall rating of A, resulting in a strong buy rating in our POWR rating system. MOH has a value rating of B, which is not surprising with a forward P / E of 17.86 and a price to free cash flow ratio well below the industry average. The company also has a B quality rating due to strong fundamentals.
Its current and fast ratios are both 1.5, which means the company has enough liquidity to cover its short-term obligations. Its return on equity of 23.4% is also encouraging. To access all Ministry of Health notes, such as Growth, Momentum, Stability and Sentiment, Click here. The Department of Health is ranked # 3 in the Medicare industry.
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This article was written by David Cohne, chief value strategist for StockNews.com. David has been helping investors find the most profitable stocks for over 20 years.
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ANTM shares remained unchanged on Thursday after trading hours. Year-to-date, ANTM has gained 35.38%, compared to 25.26% for the benchmark S&P 500 over the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. He is the chief value strategist for StockNews.com and the publisher of the POWR Value newsletter. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services firms, hedge funds and online publications. David enjoys researching and writing about stocks and markets. It takes a fundamental quantitative approach in evaluating stocks for readers. Following…