Cigna Corporation (NYSE: CI) and UnitedHealth Group (NYSE:UNH) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Cigna Corporation pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. UnitedHealth Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.5%. Cigna Corporation pays out 0.5% of its earnings in the form of a dividend. UnitedHealth Group pays out 35.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. UnitedHealth Group has raised its dividend for 7 consecutive years. UnitedHealth Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
87.9% of Cigna Corporation shares are owned by institutional investors. Comparatively, 86.2% of UnitedHealth Group shares are owned by institutional investors. 1.3% of Cigna Corporation shares are owned by insiders. Comparatively, 0.9% of UnitedHealth Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Cigna Corporation and UnitedHealth Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Cigna Corporation||$40.53 billion||1.13||$4.21 billion||$8.68||20.91|
|UnitedHealth Group||$192.60 billion||0.98||$15.57 billion||$8.54||22.79|
UnitedHealth Group has higher revenue and earnings than Cigna Corporation. Cigna Corporation is trading at a lower price-to-earnings ratio than UnitedHealth Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Cigna Corporation has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500. Comparatively, UnitedHealth Group has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500.
This table compares Cigna Corporation and UnitedHealth Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations for Cigna Corporation and UnitedHealth Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cigna Corporation presently has a consensus price target of $182.40, suggesting a potential upside of 0.49%. UnitedHealth Group has a consensus price target of $203.20, suggesting a potential upside of 4.39%. Given UnitedHealth Group’s stronger consensus rating and higher possible upside, analysts clearly believe UnitedHealth Group is more favorable than Cigna Corporation.
UnitedHealth Group beats Cigna Corporation on 11 of the 17 factors compared between the two stocks.
Cigna Corporation Company Profile
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.
UnitedHealth Group Company Profile
UnitedHealth Group Incorporated is a health and well-being company. The Company operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. It conducts its operations through two business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum. UnitedHealthcare provides healthcare benefits to an array of customers and markets, and includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global businesses. Optum is a health services business serving the healthcare marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. OptumInsight provides services, technology and healthcare solutions to participants in the healthcare industry. OptumRx provides retail network contracting, purchasing and clinical solutions.
Receive News & Ratings for Cigna Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cigna Corporation and related companies with MarketBeat.com's FREE daily email newsletter.