Humana Inc. (HUM) is a prominent player in the healthcare plans industry, operating primarily within the United States. With a robust market capitalization of $31.2 billion, Humana stands as a significant entity in the healthcare sector, providing a range of medical and specialty insurance products. The company operates through two main segments: Insurance and CenterWell, offering comprehensive services from medical care to specialty health benefits.
As of the latest price data, Humana’s stock is trading at $259.4, near its 50-day moving average of $260.12 and slightly above its 200-day moving average of $258.63. This positioning suggests a period of stability, although the RSI (Relative Strength Index) of 75.31 indicates that the stock is currently in overbought territory. Investors should be cautious of potential short-term corrections given this high RSI level.
Analyst ratings paint a mixed picture with some optimism; the stock has garnered 10 buy ratings compared to 16 hold and just 1 sell rating. The average target price of $287.83 offers a notable potential upside of 10.96% from the current levels. The target price range from $215.00 to $353.00 reflects diverse expectations, possibly due to varying assessments of the company’s growth trajectory and market conditions.
One of Humana’s standout financial metrics is its impressive revenue growth of 11.10%. This growth underpins the company’s ability to expand its market share and strengthen its financial footing. Despite the absence of a trailing P/E ratio, which might indicate past earnings challenges or accounting adjustments, the forward P/E of 20.84 suggests that analysts expect future earnings to improve, aligning with the company’s positive growth outlook.
The company’s earnings per share (EPS) of 10.69 and a return on equity of 7.16% further underscore its profitability. Additionally, Humana’s free cash flow of approximately $1.58 billion highlights its capacity to reinvest in growth opportunities and return value to shareholders via dividends.
Speaking of dividends, Humana offers a yield of 1.36% with a payout ratio of 33.12%, indicating a balanced approach to rewarding shareholders while retaining sufficient earnings for reinvestment. This payout ratio suggests that the dividend is sustainable, providing a reliable income stream for investors.
In terms of strategic operations, Humana’s contract with the Centers for Medicare and Medicaid Services and various state contracts position it well to capitalize on the growing demand for healthcare services in the U.S. Its diverse offerings, including pharmacy benefit management and senior-focused primary care centers, enhance its competitive edge in the healthcare market.
For investors, Humana presents an intriguing opportunity. The potential upside of nearly 11% combined with strong revenue growth and a solid dividend yield makes the stock appealing. However, the overbought RSI and mixed analyst ratings warrant a careful approach. Monitoring upcoming earnings reports and market conditions will be crucial for those considering an investment in Humana.
