Cigna Corp. CI seems well-poised for growth on the back of its vast and diversified business profile, a solid balance sheet and a strong operating performance.
Company’s strong business profile:
Acquisition of Express Scripts: This deal made the company a one-stop shop for customers’ healthcare needs, ranging from the sale of its drugs to insurance cover, providing it with the benefits of a vertical integration. The combined company rose through the ranks in the health insurance industry, strengthening its competitive edge.
Other Buyouts: The company in the first quarter of 2019 acquired OnePath Life Insurance from ANZ Bank in New Zealand. This acquisition enabled the company to delve deeper into an existing geography with an expanded set of solutions and capabilities to create more value for its customers, intensify its continued focus on effective capital deployment and drive long-term growth. This will also grow its international operations, which have been aiding revenues over the years.
Increasing Top Line: The company’s revenues have been bumping up consistently since the last several years. The same was up 14.4% in the first six months of 2020 owing to the acquisition of Express Scripts. For 2020, the company expects consolidated adjusted revenues in the range of $154-$156 billion, representing 10-11% growth.
Improving Bottom Line: Along with top-line growth, Cigna has been able to maintain bottom-line profitability, evident from its annual earnings growth since 2009 (except in 2016 when earnings per share declined 6.4%). Its EPS witnessed a CAGR of 17% from 2014 to 2019. This operating profitability has been maintained so far by controlled medical care cost and other operating costs. In the first six months of 2020, the company’s bottom line grew 28% year over year. For 2020, consolidated adjusted income from operations is expected to be $6.8-$7 billion or $18-$18.60 per share.