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For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Cigna (CI) ten years ago? It may not have been easy to hold on to CI for all that time, but if you did, how much would your investment be worth today?
Cigna's Business In-Depth
With that in mind, let's take a look at Cigna's main business drivers.
Headquartered in Bloomfield, CT and formed in 1982, Cigna Corp. is the result of a merger between Connecticut General Life Insurance Company and Insurance Company of North America. Cigna completed its combination with Express Scripts Holding Company by 2018-end. Shares of the new combined company have started trading on the NYSE under the stock ticker symbol “CI.”
The health service company updated its segment names to align with the launch of Evernorth and to better reflect a suite of services offered across its portfolio. With divesting its life, accident and supplemental benefits businesses to Chubb for $5.75 billion, it intends to focus more on the profitable global health services portfolio. The segment previously reported as Health Services is now reported as Evernorth and the segment previously reported as Integrated Medical is now reported as U.S Medical. There are no changes to the underlying businesses reported in either segment.
Evernorth (constitutes 92.2% of total revenues in 2021) includes a broad range of coordinated and point solution health services, including pharmacy services, benefits management, care solutions and data and analytics, which are provided to health plans, employers, government organizations, and health care providers.
Cigna Healthcare (7.8%): The segment comprises of Cigna's U.S. Commercial, U.S. Government, and International Health businesses that provide comprehensive medical and coordinated solutions to clients and customers.
Cigna's U.S. Commercial and U.S. Government businesses combined previously used to report as U.S. Medical. The businesses are retained by the company and reported in the newly created International Health operating segment that will be aggregated with its existing U.S. Commercial and U.S. Government operating segments in the renamed Cigna Healthcare reporting segment.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Cigna ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2012 would be worth $5,971.91, or a gain of 497.19%, as of May 26, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
In comparison, the S&P 500 gained 201.92% and the price of gold went up 14.31% over the same time frame.
Looking ahead, analysts are expecting more upside for CI.
Cigna’s first-quarter earnings beat estimates. Its revenues have been increasing consistently for the past several years, driven by acquisitions, superior operating performance and high-quality products portfolio. Its 2018 buyout of Express Scripts diversified its business by adding pharmacy benefits to the insurance operations. Business streamlining by divesting Group Life and Disability insurance business will help it focus on core growth areas. An expected increase in medical membership bodes well. It has been resorting to prudent capital deployment moves via buybacks and dividends. For 2022, the company expects adjusted income from operations to be at least $22.60 per share. Its shares have outperformed the industry year to date. However, high leverage can affect its financial flexibility. Rising operating costs might dent its margins.
The stock is up 5.97% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 7 higher, for fiscal 2022. The consensus estimate has moved up as well.
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Cigna Corporation (CI) : Free Stock Analysis Report
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