Aflac vs Cigna Which Should You Buy?

Aflac and Cigna are two major players in the health insurance industry, but they have distinct differences in their business models and financial performance. Aflac is known for its supplemental insurance products, focusing on policies that cover expenses not typically covered by major medical plans. Cigna, on the other hand, offers a broader range of health insurance services, including employer-sponsored plans and individual policies. Investors looking to compare Aflac and Cigna stocks should consider factors such as revenue growth, profitability, and market share within the healthcare sector.

Aflac or Cigna?

When comparing Aflac and Cigna, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Aflac and Cigna.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Aflac has a dividend yield of 1.74%, while Cigna has a dividend yield of 2.01%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Aflac reports a 5-year dividend growth of 5.26% year and a payout ratio of 27.72%. On the other hand, Cigna reports a 5-year dividend growth of 161.81% year and a payout ratio of 64.59%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Aflac P/E ratio at 16.21 and Cigna's P/E ratio at 40.05. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Aflac P/B ratio is 2.49 while Cigna's P/B ratio is 2.27.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Aflac has seen a 5-year revenue growth of 0.11%, while Cigna's is 2.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Aflac's ROE at 15.81% and Cigna's ROE at 5.59%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $110.04 for Aflac and $339.48 for Cigna. Over the past year, Aflac's prices ranged from $75.08 to $115.50, with a yearly change of 53.84%. Cigna's prices fluctuated between $253.95 and $370.83, with a yearly change of 46.02%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.