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11 Top Health Insurance Companies to Invest In
11 Best Health Insurance Stocks to Buy
1. UnitedHealth Group
Despite being a well-known name in the health insurance sector, UnitedHealth Group continually impresses investors with its stable growth and reliable returns. The company is known for carrying out strategic acquisitions to strengthen its market position and diversifying its business areas like technology and pharmacy benefits.
Even amidst global upheaval due to the COVID-19 pandemic, UnitedHealth managed to show impressive operational resilience and robust revenues throughout 2020 and into 2021. Indeed, its proven record implicitly assures potential investors about its dependability and potential for success.
Last but not least, UnitedHealth Group’s continued focus on innovation in data analytics, care delivery, and benefit structures helps it stay ahead of the competition. This provides strong support for their future performance.
Consider the fact that UnitedHealth’s share price saw almost a 20% increase in the past year despite the volatility of the health sector during the pandemic period.
- Has a strong track record of producing reliable returns.
- Constantly stays innovative in dealing with industry changes.
- Displays operational resilience even during difficult times.
- Pursuit of strategic acquisitions helps stay ahead of competitors.
- Diversification into other businesses provides an additional revenue source.
- Excellent financials with increasing dividends year after year.
2. Anthem
Anthem, another frontrunner in the health insurance sector, continuously sees dramatic stock growth thanks to its vast customer base and wide range of offered services. Beyond traditional insurance, they also provide network-based managed care plans to large and small employer, individual, Medicaid, and Medicare markets.
The firm also impresses with its earnings history, typically surpassing analysts’ expectations. Its fourth quarter 2020 results saw a 9% rise in revenues from the previous year. This suggests strong financial health and an ability to deliver consistent returns for shareholders.
Additionally, effective cost management strategies, robust cash flow generation, and a focus on enhancing digital capabilities further bolster Anthem’s investment appeal. These strengths have resulted in continued growth of the stock regardless of various market conditions.
For instance, Anthem’s premiums increased by 16% YoY in Q4 2020 while operating cash flows also grew significantly during this period.
- Has a vast customer base across several markets.
- Frequently surpasses earnings expectations.
- Effective cost management increases financial robustness.
- Focus on digital enhancement strengthens their business model.
- Generates significant and consistent cash flow.
- Provides diverse services reaching more possible customers.
3. CVS Health Corporation
Diversification seems to be the mantra for success in the health insurance sector as evidenced by the CVS Health Corporation. By acquiring Aetna, they’ve brilliantly integrated retail pharmacy with insurance—setting a new paradigm for healthcare delivery in the USA.
In addition to offering insurance products, CVS operates in areas ranging from retail pharmacy and infusions to clinical care and pharmacy benefits management. This variety reflects the strength of CVS’s business model and its position in our healthcare infrastructure.
CVS’s successful efforts to drive consumer engagement through its HealthHUB store format and digital sources underscore the company’s commitment to staying innovative. Its financial results reflect these measures, thus making it attractive for potential investors.
One interesting note is that CVS has beaten projected revenue estimates four times over the past four quarters indicating a promising trend.
- Diversified by integrating healthcare delivery with insurance.
- Shows strong performance in several operational areas.
- Succeeds in driving consumer engagement with innovation.
- Frequent record of beating revenue projections.
- Consistently strong financial results.
- Constructive improvements in the company’s digital capabilities
4. Centene Corporation
Centene Corporation has steadily emerged as a considerable player in the health insurance industry by specializing in government-sponsored healthcare programs. By catering to Medicaid and Medicare members, they’ve tailored their services to a niche yet significant portion of the market.
Despite its narrower focus compared to others on this list, Centene continues to display excellent growth rates. With solid fundamentals—scalability, diversified products offerings, and successful cost management—it’s poised to continue this positive trajectory.
Moreover, the role it plays in providing health coverage for government workers ensures a stable income stream. The combination of reliability and high-growth potential makes Centene an enticing choice for investors.
Take into consideration that in 2020, Centene’s revenues surged roughly 50% primarily due to acquisitions and organic growth.
- Specializes in government-sponsored healthcare plans.
- Displays robust growth rates despite being a niche player.
- Stable income stream due to government reliance.
- Successfully manages costs while growing the business.
- Diversified product offering catering to various needs.
- Recent revenue surge thanks to strategic moves.
5. Humana
Humana is a renowned name in the US’ health and well-being sector, with a particular strength in offering Medicare Advantage plans. Its well-established presence in the industry, backed by consistent performance, puts it in strong standing among competitors.
The company is highly consumer-focused, with a system designed to offer customized and convenient services. This customer-centric approach has helped Humana widen its client base and increase member retention, driving steady revenue growth.
Notably, their commitment to technological innovation to improve member experience is a bright spot that could add another dimension to its success story. These factors make Humana an appealing investment option with solid potential for capital growth.
Note the company’s net income saw a remarkable rise of 88% YoY in Q4 2020 underlining the firm’s financial strength.
- Strong presence in the Medicare market.
- Establishes a consumer-focused system that drives customer retention.
- Consistently increases revenue due to a wider client base.
- Focuses on technological innovation to improve member experience.
- Recent significant growth in net income validates its financial robustness.
- Has a proven track record with steady performance.
6. Molina Healthcare
Molina Healthcare is yet another health insurer focusing on government-sponsored plans like Medicaid and Medicare. The company’s commitment to serve people who receive government assistance for their medical services has made it a recognizable name in the industry.
With strong membership growth and efficient cost management, the firm presents an attractive investment proposition. Furthermore, this insurer’s strategic acquisitions and divestitures have played a key role in shaping its robust financial performance.
Molina also focuses on improving members’ health outcomes using online tools, thereby promoting customer satisfaction and loyalty. Given these points, it doesn’t seem outlandish to consider it as a viable health insurance stock to buy.
Molina Healthcare reported a stellar increase of 20% in net income from 2019 to 2020 – a testament to its financial solidity.
- Specializes in government-backed health programs.
- Maintains consistent membership growth.
- Strategic business moves to enhance financial results.
- Employs online tools for better health outcomes and customer satisfaction.
- Affirms financial viability with substantial net income growth.
- Routinely leverages strategies for cost-effectiveness.
7. Cigna
Cigna, a health services organization that provides insurance and related products, has been satisfying shareholders with its constant financial performance, extensive portfolio of product offerings, and effective approach to managing medical costs.
The company’s persistent effort to boost the pharmacy benefits management (PBM) business after acquiring Express Scripts is noteworthy in today’s healthcare landscape. By deepening its presence in the PBM marketplace, it stands poised to reap profits from this growing industry.
Additionally, Cigna’s international operations provide diversification benefits that protect it from local market volatility. Above all, their commitment to deliver high-quality care and improve patient outcomes instills confidence among potential investors.
To give an insight, Cigna outperformed earnings estimates four times consecutively in 2020 showcasing its financial consistency.
- Showcases consistent financial performance through strategic execution.
- Operates an extensive portfolio that caters to broad needs.
- An active participant in the profitable pharmacy benefits management (PBM) business.
- Benefiting from geographical diversification.
- Has a reputation for delivering high-quality healthcare.
- Managed medical costs effectively despite challenges.
8. Magellan Health
Magellan Health operates in both the managed healthcare and specialty segments, offering members related solutions and resources like life coaching, clinical consulting, fitness programs, etc.
This dual operation facade coupled with various initiatives aimed at optimizing member’s health makes them a unique player in the market. They’ve continued to perform well financially due to their diversified sources of revenues across different customer categories and regions.
Their focus on reducing fragmented and unnecessary healthcare costs makes the Magellan model particularly appealing, especially as healthcare costs continue to rise. Given these positive factors, it wouldn’t be surprising if Magellan Health is recognized as a promising candidate for health insurance stocks to buy.
In their report end of 2020, they generated revenues worth $4.8 billion and net income of $171 million showcasing impressive financial performance.
- Offers diverse healthcare solutions beyond the usual.
- Has multiple revenue sources contributing to stability.
- Focuses on optimizing members’ health through various initiatives.
- Aims to minimize unnecessary healthcare expenditures.
- Routinely generating substantial revenue and net income.
- Caters to an extensive range of customer categories and regions.
9. WellCare Health Plans
Focusing mainly on government-sponsored managed care services, WellCare Health Plans has carved out a niche for themselves in this market. Its smart move of acquiring Meridian in 2018 helped expand its Medicaid business and increase membership significantly.
Though targeted towards a narrower audience, the company’s commitment to providing high-quality and cost-effective healthcare solutions renders it attractive. With solid growth prospects, backed by successful strategic acquisitions, WellCare presents itself as a potentially strong investment.
On top of that, it’s robust operating performance combined with growth enhancement strategies, makes WellCare worthy of consideration for potential investors seeking a flourishing health insurance stock.
To put into context, the company saw a whopping 37% YoY growth in terms of total revenue in 2019 post-Meridian acquisition.
- Focused on government-sponsored managed healthcare services.
- Significantly increased membership post its strategic acquisition.
- Consistently delivers high-quality and cost-efficient services.
- Solid growth prospects based on successful strategies.
- Displays excellent operational performance amidst changes.
- Demonstrated substantial revenue growth recently.
10. HealthEquity Inc.
HealthEquity Inc. isn’t a typical health insurance company; they’re actually a leading Health Savings Account (HSA) provider. HSAs are gaining popularity as a means of dealing with high deductible health plans, which potentially builds an ideal environment for HealthEquity’s distinctive offerings.
The company continually grows its HSA member base while also increasing the average account size, resulting in commendable revenue growth over time. Leveraging cutting-edge technology and providing outstanding service to help individuals manage healthcare savings enhances HealthEquity’s value proposition.
Moreover, consistent business expansion through acquisitions like WageWorks further boosts their market position. The combination of all these factors strongly suggests that HealthEquity is definitely worth considering for anyone interested in investing in health-related stocks.
If we look at HealthEquity’s 2020 report, their revenues recorded growth of around 30% YoY due to expanding client base and average account size.
- Leads in the Health Savings Account (HSA) market.
- Increasingly grows HSA members fostering revenue growth.
- Provides superior customer service and employs modern technology.
- Boosts market position through strategic acquisitions.
- Outstanding performance in a rising demand trend for HSAs.
- Recorded significant revenue increase in recent years.
11. AmerisourceBergen Corporation
Last but certainly not least on our list is AmerisourceBergen Corporation, one of the world’s largest pharmaceutical services companies. It creates a unique niche by connecting a diverse network of providers across the pharmaceutical supply channel.
The corporation has been witnessing a spurt in its top line thanks to strategic lucrative deals and the increasing demand for pharmaceutical products amid the ongoing pandemic. Establishing partnerships with the likes of Walgreens Boots Alliance brings significant leverage and potential for growth.
Furthermore, its robust cash flow generation, outstanding return on equity, and strong financial health make AmerisourceBergen a compelling investment. These positive attributes contribute to analysts’ optimistic outlook on the company.
Recently, in Q1 2021, the company saw its revenues increase almost 10% YoY displaying solid financial strength.
- Plugs into all aspects of pharmaceutical supply channel.
- Witnesses consistent top-line growth driven by strategic alliances.
- Maintains substantial cash flow and excellent return on equity.
- Partnerships with mega giants like Walgreens produce fruitful results.
- Operates within a trend of rising demand for pharmaceutical products.
- Demonstrable growth in recent revenue reports.
Summary Table: Health Insurance Stocks Worth Buying
Company | Notable Qualities |
---|---|
UnitedHealth Group | Revenue resilience during pandemic, innovative strategies, successful acquisitions |
Anthem | Vast customer base, surpasses earnings expectations, digital enhancement focus |
CVS Health Corporation | Diversification in healthcare, consistent beat to revenue estimates, strong performance across industries |
Centene Corporation | Specialization in government healthcare programs, demonstrable growth rates, stable income stream |
Humana | Consumers-focused approach, technological innovation, success in Medicare market |
Molina Healthcare | Focused on government plans, strategic business moves, strong net income growth |
Cigna | Constant financial performance, broad product portfolio, participation in PBM business |
Magellan Health | Diverse health care solutions, minimizes healthcare costs, significant revenue, and net income |
WellCare Health Plans | Strategic acquisitions, solid operational performance, substantial revenue growth |
HealthEquity Inc. | Leading position in HSA market, utilizes cutting-edge technology, expanding client base |
AmerisourceBergen Corporation | Links to pharmaceutical supply channel, strategic partnerships, excellent return on equity |
Choosing to invest in a stock, especially in an extremely dynamic sector such as healthcare, should entail thorough research and assessment. The prospects might look promising today but could change quite rapidly due to a plethora of factors like regulatory shifts, alteration in industry trends, economic changes, etc.
I hope this list helped you recognize some potential health insurance stocks worth considering. Happy investing!