June 23, 2022
  • June 23, 2022

4 health insurance companies set to grow in 2H21

By on August 18, 2021 0


The health insurance industry is well positioned for growth due to an aging population and a boom in Medicaid and Medicare business. The main players aim for progress with sufficient capital and a growing workforce.

Large companies in the sector performed well in the first half of the year thanks to increased enrollments, increased premium income, healthy balance sheets, capital deployment, stable cash flow, contracts won, and more.

Additionally, after strong second quarter results, companies like Hymn inc. ANTM has increased its advice. Also, Centene Company CNC anticipates better revenues and EPS compared to its respective previous projections.

Factors likely to have an impact on insurers in 2 hours

Strong Medicaid Company: The whole of the United States has been grappling with financial problems of late, emanating from the COVID-19 epidemic. As the economy gradually shows signs of a steady recovery, we believe there are huge prospects for Medicaid’s business. This is because Medicaid health plans typically provide coverage to low income groups across the country.

Strong growth supported by the retirements of baby boomers: Medicare and Medicaid – government-sponsored programs for the retired and the underprivileged – have been in high demand for some time now among a huge population of baby boomers approaching retirement age. In addition, the expansion of Medicaid has increased the number of registrations for this plan. Both plans have seen increasing participation from private health insurers as states approach them to effectively manage the expenses of these plans.

Increase in telehealth services: Since the pandemic hit the world, people have been adjusting to the new normal that has fueled the adoption of telehealth facilities. Remote healthcare has been a means of medical assistance, especially in the midst of the pandemic that has unfolded so far. This, in turn, stimulates the demand for telemedicine expertise and ultimately stimulates the telehealth market, which has long been irrelevant. Health insurers like Anthem and Magellan Health, Inc. MGLN has improved its virtual health care services and its member aid offerings.

Financial flexibility: Most of the major health insurance companies have healthy balance sheets, which will likely help them stay in business. Companies have experienced strong levels of solvency through which they are able to deploy capital to their shareholders in the form of buyouts and dividends.

What will keep the momentum going?

We believe that the future outlook for the health insurance industry is bright despite the pandemic. It is recovering from the growth in its turnover, the growing contribution of complementary activities, product modifications, enriched services, the expansion of international operations, better handling of complaints, cost reduction, technology investments and upgrades, mergers and acquisitions and balance sheet strength.

The bullish global scenario leads us to believe that growth will be constant in this industry, which should boost the outlook for companies with solid business fundamentals. In addition, this dynamism in the health insurance space is confirmed by its Zacks Industry Rank in the top 41% (105 out of 254).

In one year, the industry grew 28.2%, underperforming the growth of the S&P 500 index by 35.7%.

Watchlist actions

The growth trajectory of the industry has remained stable so far, and there are plenty of opportunities for industry players to exploit progress in the near future. So, investing in this area should be a wise move, especially at a time when other sectors are feeling the heat.

Let’s take a look at which stocks should be on investor radar right now. Here we choose four options that currently have an attractive VGM score and Zacks (Hold) rank 3. Therefore, these companies have great potential to retain a purple stain in the future.

You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

Anthem is well positioned for growth with its growing membership, strong outlook for 2021, buyouts and collaborations, and an expanded product portfolio. The company currently has a Zacks rank of 3 and a VGM score of A. The stock has seen its 2021 profit estimate move 1.2% north over the past 30 days. The consensus mark for 2021 profits shows a 13.7% increase from the figure released a year ago. In one year, the company’s shares have gained 36.4% from the 28.2% increase in its industry.

Molina Health, Inc.The ability of the Department of Health to engage in inorganic growth and capital deployment initiatives reflects an improved financial situation. His strong forecast for 2021 is also impressive. He has an VGM score of A and is currently ranked Zacks # 3. The company’s profit estimate for the current year is expected to rise 25.8% from the figure released in 2020. Over the past 30 days, the stock has seen its profit estimate for the year. current year revised by 0.3% upwards. Molina Healthcare has jumped 34.8% in the past year.

UnitedHealth Group IncorporatedThe continued strong growth of the UNH at Optum as well as the UnitedHealthcare segments are driving revenues. Its favorable government affairs and strong capital position are other bright spots. With a Zacks Rank # 3 at the moment, the company has a VGM score of B. Over the past 30 days, the stock has seen its current year profit estimate revised from 0.2% to the rise. The company’s profit estimate for the current year is expected to rise 11.1% from the figure released in 2020. In one year, the stock has jumped 35.1%.

Centene Corporation’s leadership position in the industry is largely supported by its prudent operating performance, strong inorganic growth and strong fundamentals. A strong 2021 orientation is also impressive. The company currently has a Zacks Rank # 3 and VGM score of A. Its profit estimate for the current year is expected to rise 2.8% from the published figure for 2020. In one year, the stock grew 3.6%.

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UnitedHealth Group Incorporated (UNH): Free Stock Analysis Report

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