Anthem (NYSE: ANTME) American health insurance company. Her business is stable, and it is inexpensive compared to its competitors.. But there are a couple of nuances, which should be taken into account.
What do they earn
Anthem Provides Health Insurance Services. According to the company's annual report, its revenue is divided into the following segments:
- Commercial sector and special patients - 30,37%. These are private sector employers, as well as elderly patients. Segment operating margin — 7,3% from its proceeds.
- State insurance - 59,24%. People, Medicare and Medicaid insured, as well as the company's services to the US federal government. Segment operating margin — 3,4% from its proceeds.
- IngenioRx — 18,13%. Pharmaceutical Brokerage Program. Segment operating margin — 6,2% from its proceeds.
- Other - 5%. These are the company's assets in various medical businesses - like insurance, as well as medical, as well as part of mutual settlements between different segments of the company.
Maybe, have you noticed, that the total amount is more 100%. This is because the share of various segments is indicated without taking into account corporate settlements between different divisions of the company..
The company operates only in the USA.
Arguments in favor of the company
The first guys in the village. Comparing Anthem to similar health insurers, She doesn't look overrated at least.. This may help attract investors to its shares..
Mixed feelings. Coronacrisis has brought companies as negative, as well as positive consequences. The downside was the increase in costs., related to patient benefits and adherence to safety protocols.
But increased insurance premiums and insurance coverage of the population, as well as investment income of the company.
In general, Anthem's business looks quite stable and has passed the test of the coronavirus crisis - this can attract investors to the company's shares, seeking certainty in uncertain times.
What can get in the way
It also happens. In general, the company's business is quite stable, and for the last 15 for years she has not finished a single year with losses. However, long-term health problems, that seems to be caused by the coronavirus, in subsequent years may lead to an increase in insurance claims and a drop in Anthem's profitability.
This risk is very theoretical., because we still don't know much about the massive long-term effects of the corona crisis. And what's more, we don't even know, Will these consequences qualify as an insured event?. But let's keep this risk in mind..
For medicine. Another hypothetical risk is the revision of the current US health insurance system. Participation in these programs makes Anthem the main money, and a simple change in the rules of their work can lead to a large increase in the costs of the company.
pennies. The company spends on dividends 4,52 $ per share per year, which gives approximately 0,97% per annum. It's very little, even if we take into account the stability of the company's business.
Anthem spends roughly $1.07 billion a year on dividends — roughly 19,38% from her profits for the past 12 Months. Looks like there's room for more payouts, but don't forget that, what is the insurance business, where there are always risks of growth in insurance payments.
So I don't think, that the company will significantly increase the amount of dividends in the near future. And these 0,97% per annum is unlikely to allow us to hope for an influx of dividend investors.
Resume
Anthem looks like a good investment for American health insurance overall.: it is not very expensive compared to competitors and is very stable. But the hypothetical risks of a revision of the US health insurance system and an increase in the number of insurance claims could ruin everything..
