Anthem, Inc. Health Benefits Company (ANTM) in Indianapolis operates through four segments: Commercial & Specialty Business; government affairs; IngenioRx; and other. It offers a range of network managed healthcare plans. In comparison, Clover Health Investments, Corp. (CLOV) in Franklin, Tennessee, operates as a Medicare Advantage insurer. Through its assistant Clover, the company offers Preferred Provider Organization and Health Maintenance Organization health plans for Medicare-eligible consumers.

The COVID-19 pandemic has highlighted the importance of healthcare plans. Additionally, with an aging population, healthcare plans are in high demand. The health care plan industry is considered relatively stable in terms of performance, given the near-inelastic demand for health care plans, making it an investor favorite in volatile markets. Furthermore, the advent of advanced smartphone applications and updated insurance plans are expected to help drive the market growth in the near future. Thus, ANTM and CLOV should benefit.

ANTM stock has gained 5% in price over the past three months, while CLOV has generated negative returns. Additionally, ANTM’s 18.7% gains over the past six months compare to CLOV’s negative returns. Additionally, ANTM is the clear winner with gains of 55.5% over CLOV’s negative returns in terms of past year performance.

Click here to view our 2022 Healthcare Sector Report

But which of these two stocks is a better buy now? Let’s find out.

Latest developments

On January 26, 2022, Gail K. Boudreaux, President and Chief Executive Officer of ANTM, said, “We enter 2022 with continued momentum across all of our businesses, and we are confident in our ability to generate consistent earnings growth. with our long-term strategy. targeted range as we innovate for consumers and advance our digital health platform.

On January 10, 2022, CLOV announced Medicare Advantage enrollment growth of more than 25% from the start of 2021, beating the overall industry growth average of approximately 10% year-over-year . Andrew Toy, President of CLOV, said, “We believe our dramatic growth in Georgia demonstrates how the model we’ve hosted in New Jersey is replicable in other states and we look forward to further establishing a presence. MA from Clover in key markets this year.

Recent financial results

ANMT’s revenue increased 14.9% year-over-year to $36.58 billion for its fiscal fourth quarter, ended December 31, 2021. In addition, the company’s adjusted net income grew 98% year-over-year to $1.26 billion, while its EPS was $5.14, up 102.4% year-on-year other.

CLOV’s revenue increased 152.6% year-over-year to $427.20 million for its fiscal third quarter, ended September 30, 2021. However, its Adjusted EBITDA loss increased by 411.5% year over year to $102.30 million. And its net loss was $34.50 million, compared to $12.80 million in revenue in the year-ago quarter.

Expected financial performance

Analysts expect ANTM’s revenue to grow 13.3% for the quarter ending March 31, 2022 and 11.6% in fiscal 2022. The company’s EPS is expected to increase by 10.3% for the quarter ending March 31, 2022 and 9.7% in fiscal 2022. , its EPS is expected to grow at a rate of 12.9% per annum over the next five years.

By comparison, CLOV’s revenue is expected to increase 206.2% for the quarter ending March 31, 2022 and 80.9% in fiscal 2022. Its EPS is expected to decline 76.9% for the quarter ending. ending March 31, 2022, increase 23.7% in fiscal 2022. The company’s EPS is expected to grow at a rate of 18% per annum over the next five years.

Profitability

ANTM’s trailing 12-month revenue of $138.64 billion is higher than CLOV’s $1.16 billion. Furthermore, ANTM is more profitable with gross and net profit margins of 25.96% and 4.40%, respectively, compared to negative returns of CLOV.

Moreover, the respective ROE, ROA and ROTC of 17.58%, 5.94% and 9.64% of ANTM compare to the negative values ​​of CLOV..

Evaluation

In terms of rolling 12 months P/S, ANTM is currently trading at 0.82x, which is 36.7% higher than CLOV’s 0.60x. And ANTM’s trailing 12-month EV/S of 0.93x is 9.4% higher than CLOV’s 0.85x.

Thus, CLOV is more affordable.

POWR Rankings

ANTM has an overall A rating, which equates to a strong buy in our own POWR Rankings system. In comparison, CLOV has an overall F rating, which translates to a strong sell. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.

ANTM has a B rating for quality. This is justified given ANTM’s 6.31% 12-month EBIT margin, which is 171.4% higher than the industry average of 2.32%. On the other hand, CLOV has a quality rating of D, which is in line with its negative 12-month EBIT margin, which compares to the industry average of 2.32%.

ANTM also has a B rating for growth, which is in line with analysts’ expectations that its EPS will increase in the coming months. In contrast, CLOV has a growth rating of D, in line with analysts’ expectations that its EPS will decline in the coming months.

Among 11 B-rated stocks Medical – Health insurance industry, ANTM is ranked third, while CLOV is ranked last.

Beyond what I said above, we also evaluated stocks in terms of value, sentiment, momentum and stability. Click here to see all ANTM ratings. Also get all CLOV ratings here.

The winner

As the demand for health care plans is expected to increase, ANTM and CLOV stand to benefit. However, we believe ANTM is a better buy now due to its strong financials, better growth prospects and higher profitability.

Our research shows that the odds of success increase when investing in stocks with an overall strong buy or buy rating. See All Other Top Rated Stocks in Medical – Health Insurance here.

Click here to view our 2022 Healthcare Sector Report


ANTM shares were unchanged in premarket trading on Friday. Year-to-date, the ANTM is down -2.63%, compared to a -7.88% rise in the benchmark S&P 500 over the same period.

About the Author: Nimesh Jaiswal

At Nimesh Jaiswal a fervent interest in the analysis and interpretation of financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving the price of a stock is the key approach he follows while advising investors in his articles. Continued…

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