ELV
I started a position in ELV at $374.38 yesterday. here is what I like.
1) The sector of medical insurance has been out of favor and recently has gotten hit again and again thanks to UNH which is one disaster after another. However has times has gone on, it is becoming very apparent to me this is more a bunch of issues at UNH, rather than problems with the sector.
2) ELV has guided for $34.15-34.85 this year and I expect around $35 this year, and analyst estimates are for north of over $39 next FY as ELV should return to more historical growth patterns. That means ELV is trading at a PE of around 9x next years estimates. Historically ELV has traded in the 15-18 range, so the multiple is very depressed right now. If they return to the 15 multiple and earn over $39 next year, I see FV around $585, which would almost be slightly under a 60% return from here counting the dividend over the next 12 months.
3) ELV continue to return capital to shareholders. They don't have an enormous dividend but they are a pretty solid divy grower.
2020 $0.95 a quarter ($3.80 annualized)
2021 $1.13 a quarter ($4.52 annualized)
2022 $1.28 a quarter ($5.12 annualized)
2023 $1.48 a quarter ($5.92 annualized)
2024 $1.63 a quarter ($6.52 annualized)
2025 $1.71 a quarter ($6.84 annualized)
In addition to a albeit small on a dividend yield front, but solidly growing dividend, the company also buyback stock, in fact last quarter they picked up the pace purchasing 2.2 million shares or 880 million $ worth. End result is I expect them to continue to knock down the share count decently over all of the current FY.
Conclusion: I think ELV is attractive at current levels, I think they got hit recently again and again thanks to the constant failing of UNH which as I said earlier is become one disaster after another. in the meantime ELV has continued to execute and reiterated solid guidance for FY 25. Time will tell. All is just my opinion, and I could always be wrong though.
AI
