On Jun 10, 2013, the shares of WellPoint Inc. (
WLP ) reached a
52-week high of $79.78. The momentum was driven by the company's
strong first-quarter results, which included a 24.1% positive
Further, WellPoint's leading market position, diversified
product portfolio, efficient capital management and strategic
acquisitions provide the fundamental strength required to drive
share value. With respect to earnings trend, the company delivered
positive earnings surprise in 3 of the past 4 quarters, with an
average beat of 11.4%.
On Apr 24, 2013, WellPoint reported first-quarter 2013 adjusted
income of $2.94 per share, beating the Zacks Consensus Estimate of
$2.37. Adjusted income also surpassed the year-ago earnings of
$2.34 per share by 25.6%.
Operating revenues of WellPoint for the reported quarter were
$17.5 billion, up 15.8% from the year-ago quarter. Revenues,
however, lagged the Zacks Consensus Estimate of $18.0 billion. The
increase in revenues resulted from the acquisition of Amerigroup,
partly offset by the decline in fully insured Local Group and
Additionally, WellPoint announced a 30% hike in its quarterly
dividend to 37.5 cents per share on Feb 21, 2013. The company spent
$2.9 billion on share repurchases and dividends in 2012, while it
expects to deploy about $2 billion for the same in 2013.
However, the valuation of WellPoint looks reasonable. The shares
are trading at a discount of 11.9% and 44% to its peers on a
forward price-to-earnings basis and price-to-book basis,
respectively, while the return on equity of 10.7% is 14.4% lower
than the peer group average of 12.5%. Nevertheless, the
year-to-date return from the stock was 30.6%, much above the
S&P's return of 15.2%.
WellPoint currently carries a Zacks Rank #2 (Buy). Other health
maintenance organizations worth considering are Molina
Healthcare Inc. ( MOH ) - Zacks Rank #1
(Strong Buy), Aetna Inc. ( AET ) - Zacks Rank #2
(Buy) and Health Net Inc. ( HNT ) - Zacks Rank #2
(Buy).AETNA INC-NEW (AET): Free Stock Analysis ReportHEALTH NET INC (HNT): Free Stock Analysis
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