Humana vs Cigna

Humana and Cigna are two major players in the health insurance industry, with both companies offering a range of healthcare products and services to their customers. Investors looking to make a bet on the future of healthcare may consider investing in either Humana or Cigna stocks. Both companies have seen steady growth in recent years, with Humana's stock price outperforming Cigna's in terms of return on investment. However, market trends and regulatory changes can impact the performance of both stocks, making it important for investors to carefully monitor and analyze these factors before making an investment decision.

Humana or Cigna?

When comparing Humana 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 Humana 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. Humana has a dividend yield of 1.37%, while Cigna has a dividend yield of 1.96%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Humana reports a 5-year dividend growth of 12.10% year and a payout ratio of 25.48%. On the other hand, Cigna reports a 5-year dividend growth of 161.81% year and a payout ratio of 64.63%.

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 Humana P/E ratio at 18.13 and Cigna's P/E ratio at 41.89. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Humana P/B ratio is 1.86 while Cigna's P/B ratio is 2.37.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Humana has seen a 5-year revenue growth of 1.07%, while Cigna's is 2.37%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Humana's ROE at 10.37% and Cigna's ROE at 5.37%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $251.24 for Humana and $344.15 for Cigna. Over the past year, Humana's prices ranged from $213.31 to $530.54, with a yearly change of 148.72%. 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.