Head to Head Review: Anthem (ANTM) & Cigna Corporation (CI)

Anthem (NYSE: ANTM) and Cigna Corporation (NYSE:CI) are both large-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Valuation & Earnings

This table compares Anthem and Cigna Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Anthem $88.03 billion 0.57 $5.75 billion $10.56 17.98
Cigna Corporation $40.53 billion 1.16 $4.21 billion $8.68 21.54

Anthem has higher revenue and earnings than Cigna Corporation. Anthem is trading at a lower price-to-earnings ratio than Cigna Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Anthem and Cigna Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anthem 3.24% 12.93% 4.96%
Cigna Corporation 5.55% 17.40% 4.04%

Volatility and Risk

Anthem has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Cigna Corporation has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Institutional and Insider Ownership

87.7% of Anthem shares are owned by institutional investors. Comparatively, 87.9% of Cigna Corporation shares are owned by institutional investors. 0.4% of Anthem shares are owned by company insiders. Comparatively, 1.3% of Cigna Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Anthem pays an annual dividend of $2.80 per share and has a dividend yield of 1.5%. Cigna Corporation pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Anthem pays out 26.5% of its earnings in the form of a dividend. Cigna Corporation pays out 0.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cigna Corporation has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Anthem and Cigna Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anthem 0 8 9 0 2.53
Cigna Corporation 0 1 12 0 2.92

Anthem currently has a consensus target price of $186.19, indicating a potential downside of 1.95%. Cigna Corporation has a consensus target price of $188.23, indicating a potential upside of 0.69%. Given Cigna Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Cigna Corporation is more favorable than Anthem.

Summary

Cigna Corporation beats Anthem on 11 of the 17 factors compared between the two stocks.

Anthem Company Profile

Anthem, Inc. is a health benefits company. The Company operates through three segments: Commercial and Specialty Business, Government Business and Other. It offers a spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; indemnity plans and other hybrid plans, including consumer-driven health plans; and hospital only and limited benefit products. It also provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It provides an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits and radiology benefit management.

Cigna Corporation Company Profile

Cigna Corporation (Cigna), together with its subsidiaries, is a health services company. The Company offers medical, dental, disability, life and accident insurance and related products and services. The Company’s segments include Global Health Care, Global Supplemental Benefits, Group Disability and Life, and Other Operations and Corporate. Its Global Health Care segment aggregates the commercial and Government operating segments. Its commercial operating segment encompasses the United States commercial and certain international healthcare businesses serving employers and their employees, other groups, and individuals. Its Global Supplemental Benefits segment offers supplemental health, life and accident insurance products in selected international markets and in the United States. Its Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, accident and specialty insurance and related services.

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