Coventry Health Care (CVH) & Cigna (CI) Critical Analysis

Coventry Health Care (NYSE: CVH) and Cigna (NYSE:CI) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Coventry Health Care and Cigna’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Coventry Health Care N/A N/A N/A
Cigna 5.74% 18.85% 4.37%

Analyst Recommendations

This is a summary of recent recommendations for Coventry Health Care and Cigna, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Coventry Health Care 0 0 0 0 N/A
Cigna 0 2 12 0 2.86

Cigna has a consensus target price of $201.21, suggesting a potential downside of 1.42%.

Insider & Institutional Ownership

87.9% of Cigna shares are owned by institutional investors. 1.3% of Cigna shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Coventry Health Care and Cigna’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Coventry Health Care N/A N/A N/A $3.29 N/A
Cigna $39.67 billion 1.27 $1.87 billion $9.13 22.36

Cigna has higher revenue and earnings than Coventry Health Care. Coventry Health Care is trading at a lower price-to-earnings ratio than Cigna, indicating that it is currently the more affordable of the two stocks.

Dividends

Cigna pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Coventry Health Care does not pay a dividend. Cigna pays out 0.4% of its earnings in the form of a dividend.

Summary

Cigna beats Coventry Health Care on 9 of the 10 factors compared between the two stocks.

About Coventry Health Care

Coventry Health Care, Inc. (Coventry) is a diversified national managed healthcare company based in Bethesda, Maryland. Coventry operates health plans, insurance companies, network rental and workers’ compensation services companies. The Company operates in three segments: Health Plan and Medical Services, Specialized Managed Care, and Workers’ Compensation. On January 1, 2012 the Company completed its acquisition of Children’s Mercy’s Family Health Partners, a Medicaid health plan. In May 2013, Aetna Inc announced it has completed its acquisition of Coventry Health Care, Inc.

About Cigna

Cigna Corporation (Cigna), together with its subsidiaries, is a health services company. The Company offers medical, dental, disability, life and accident insurance and related products and services. The Company’s segments include Global Health Care, Global Supplemental Benefits, Group Disability and Life, and Other Operations and Corporate. Its Global Health Care segment aggregates the commercial and Government operating segments. Its commercial operating segment encompasses the United States commercial and certain international healthcare businesses serving employers and their employees, other groups, and individuals. Its Global Supplemental Benefits segment offers supplemental health, life and accident insurance products in selected international markets and in the United States. Its Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, accident and specialty insurance and related services.

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