If you invested $ 1,000 in Humana a decade ago, here’s how much it would be worth now
The change in a stock’s price over time is an important factor for most investors. Not only can price performance impact your portfolio, it can also help you compare investment results across sectors and industries.
Another thing that can motivate investing is the fear of missing out, or FOMO. This especially applies to tech giants and popular consumer actions.
What if you had invested in Humana (HUM) ten years ago? It might not have been easy to hold onto HUM all this time, but if it was, how much would your investment be worth today?
Deepening Humana’s Business
With that in mind, let’s take a look at the main business drivers for Humana.
Founded in 1964 and headquartered in Louisville, KY., Humana Inc. is one of the largest providers of health care plans in the United States. It was organized as a Delaware corporation in 1964. It provides health insurance benefits under the Health Maintenance Organization (HMO), Private Fee-For-Service (PFFS) and Preferred Provider Organization plans. (PPO). The company also offers other benefits with specialty products, including dental, vision care, and other additional benefits.
It left 2020 with around 17 million members under its health insurance plans and around 5.3 million members in its specialty products category.
Humana’s medical and specialty insurance products provide members with access to healthcare services primarily through its networks of healthcare providers.
Humana now manages its activities through four segments:
The Retail segment (87.2% of the company’s total revenue in 2020): The segment includes Medicare benefits, which are retailed to individuals. .
The Group segment (9.4%): this includes fully insured commercial and specialized health insurance benefits for the group of employers, including dental, ophthalmological and other complementary and voluntary health insurance benefits, as well as administrative services products only.
Healthcare Services (3.4%): The segment includes services offered to members of the Company’s healthcare plan as well as third parties, including pharmacy solutions, provider services, home care services and clinical programs, as well as services and capacities to advance populations’ health.
In addition, there is a category Other companies which includes companies, which are not to be declared separately because they do not respect the quantitative thresholds.
The company left the individual commercial activity as of January 1, 2018.
Anyone can invest, but building a successful investment portfolio requires a combination of several things: research, patience, and a little bit of risk. So if you had invested in Humana ten years ago, you are probably feeling pretty good about your investment today.
By our calculations, a $ 1,000 investment made in July 2011 would be worth $ 5,435.15, or a gain of 443.52%, as of July 5, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 224.88% and the price of gold rose 13.32% during the same period in comparison.
Analysts are anticipating more potential for HUM.
Humana shares have outperformed the industry in a year. The company is well positioned to grow thanks to strong Medicare activity, which has been doing well for several quarters. The company’s Medicaid business has also contributed to its revenue for years. Acquisitions and alliances position it well for growth. His forecast for 2021 is impressive. For the current year, adjusted EPS for 2021 is expected to be between $ 21.25 and $ 21.75. It has deployed excess capital in recent years thanks to its strong balance sheet. Strong operating cash flow is an added benefit. However, its growing costs weigh on the bottom line. The company is expected to continue to bear high costs due to COVID-19 testing. Its low ROE hinders the company.
The stock has jumped 5.97% in the past four weeks. In addition, no profit estimate has fallen over the past two months, compared to two more for fiscal 2021; the consensus estimate also increased.
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