Did you get your annual check-up last year? I certainly hope so, but if you didn’t, you’re not alone.
According to a recent survey by insurance giant Cigna (CI), nearly half of all insured American adults don’t even know they should be getting an annual check-up. What’s more, even more people are unaware that their insurance company is required by law to cover annual check-ups at no cost to the insured. So you can take care of your physical health and your financial health simultaneously. Sounds like a win-win to me.
Speaking of your financial health, did you know your physical health could potentially cost you even more dollars if you don’t keep it in check? Unhealthy variations in your body mass index (BMI) can cost you up to $2,460 in healthcare costs annually. Now, that’s no small number. Especially when Cigna, one of the insurance companies footing your check-up bills, is reminding you to get your free check-up each and every year.
So what is this kind of “do-goodery” doing for Cigna as an overall investment?
For starters, Cigna saw strong top-line growth in the third quarter, thanks to strong results from its Global Healthcare, Group Disability and Life segments. Over the same period, adjusted earnings increased 11% to $593 million, or $2.28 per share. This topped the $2.20 consensus EPS estimate by 3.6%.
Then, looking ahead to full-year 2015, Cigna raised its earnings target. The company is now expecting earnings per share between $8.40 and $8.60. Compared with FY 2014, this works out to between 13.1% and 15.7% annual earnings growth.
Maybe that’s why Anthem (ANTM) currently has an offer on the table to buy Cigna for $54 billion, potentially creating a massive 53 million member health insurance company. This merger, which has already been approved by shareholders, would help Anthem finally surpass United Healthcare as the largest provider of health insurance in the United States, which is no small feat. All this offer still needs is approval from the federal government. But it now looks like we could see that as early as the second half of 2016.
Add it all up, and you can see why Cigna is good for your financial health. It’s currently maintaining a solid A-rating in my Portfolio Grader tool.
P.S. If you’d like more information on CI, including my current price limit for the stock, you can access it through a risk-free trial of Blue Chip Growth.