Why Should You Retain WellCare Health in Your Portfolio?
WellCare Health Plans, Inc. WCG is well-poised for growth on the back of rising membership aided by its inorganic growth plans.
The company looks well-set for progress, evident from its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors.
Its long-term growth rate stands at 14.6%, higher than the industry's average of 14%, which is steadily positive for the company.
The company recently signed a merger agreement with Centene Corporation to form the premier managed care enterprise with focus on government sponsored programs. This transaction, approved by the boards of both companies, will make the combined entity a leader in the Medicaid, Medicare and Health Insurance Marketplace. The company will have a wider scale and diversification with higher Medicaid and Medicare members. The acquisition is expected to close in the first half of 2020. All these measures bode well for long-term growth.
Now, let’s focus on some important factors that make the company an investor favorite.
Its revenues have been growing constantly since 2006 on the back of its organic and inorganic growth plans. Its success is reflected in its 2012-2018 CAGR of 18.4%. In the first six months of 2019, the trend continued with the metric surging 48.3% year over year on the back of the Meridian buyout and organic growth across all three lines of business, namely Medicaid, Medicare and Medicare PDPs. We expect the company’s revenues to consistently rise owing to its firm strategies.
Buyouts and collaborations have always been instrumental in the company’s growth trajectory. Recent acquisitions have helped boost its Medicaid business as well as diversify the same portfolio.
Additionally, the company’s strategic takeovers have enabled it to become the topmost Medicaid provider. These initiatives have also contributed to its growing membership. Over the last three years, WellCare Health’s Medicaid membership has strengthened on 17.1% average.
Shares of this Zacks Rank #3 (Hold) company have lost 13% in a year’s time, narrower than its industry’s decline of 13.3%.
Stocks to Consider
Investors interested in the medical sector can take a look at some better-ranked stocks like Molina Healthcare, Inc MOH, Humana Inc. HUM and The Ensign Group, Inc. ENSG, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Molina offers Medicaid-related solutions to meet the health care needs of low-income families and individuals. In the trailing four quarters, the company came up with average beat of 66.9%.
Humana works as a health and well-being company in the United States. The company pulled off average positive surprise of 7.79% in the preceding four quarters.
Ensign Group provides health care services. In the last four quarters, the company delivered average beat of 2.49%.
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Humana Inc. (HUM): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.