Humana vs Medicare

Humana and Medicare stocks are two common investments in the healthcare sector, but they represent different aspects of the industry. Humana is a leading health insurance provider, offering coverage to millions of individuals across the United States. On the other hand, Medicare stocks refer to companies that provide services or products related to the federal health insurance program for individuals aged 65 and older. Both types of stocks have the potential to be profitable investments, but they come with their own unique risks and opportunities.

Humana or Medicare?

When comparing Humana and Medicare, 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 Medicare.

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 Medicare has a dividend yield of 9.57%. 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, Medicare reports a 5-year dividend growth of -42.00% year and a payout ratio of 153.22%.

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 Medicare's P/E ratio at 31.86. 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 Medicare's P/B ratio is 1.35.

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 Medicare's is 0.00%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Humana's ROE at 10.37% and Medicare's ROE at 4.05%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $251.24 for Humana and ر.ق4.60 for Medicare. Over the past year, Humana's prices ranged from $213.31 to $530.54, with a yearly change of 148.72%. Medicare's prices fluctuated between ر.ق3.90 and ر.ق5.70, with a yearly change of 46.15%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.