Analyzing Aetna (AET) and Its Competitors

Aetna (NYSE: AET) is one of 14 publicly-traded companies in the “Managed Health Care” industry, but how does it weigh in compared to its competitors? We will compare Aetna to similar companies based on the strength of its profitability, analyst recommendations, risk, dividends, valuation, institutional ownership and earnings.

Profitability

This table compares Aetna and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aetna 2.52% 20.52% 5.35%
Aetna Competitors 1.70% 10.53% 3.41%

Valuation & Earnings

This table compares Aetna and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Aetna $62.20 billion $6.06 billion 34.08
Aetna Competitors $52.30 billion $3.74 billion 17.51

Aetna has higher revenue and earnings than its competitors. Aetna is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

Aetna has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Aetna’s competitors have a beta of 0.76, meaning that their average stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Aetna and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aetna 0 5 13 0 2.72
Aetna Competitors 79 860 1412 22 2.58

Aetna presently has a consensus target price of $162.80, indicating a potential upside of 4.29%. As a group, “Managed Health Care” companies have a potential upside of 0.78%. Given Aetna’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Aetna is more favorable than its competitors.

Insider & Institutional Ownership

89.5% of Aetna shares are held by institutional investors. Comparatively, 90.2% of shares of all “Managed Health Care” companies are held by institutional investors. 1.1% of Aetna shares are held by insiders. Comparatively, 2.5% of shares of all “Managed Health Care” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Aetna pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. Aetna pays out 43.7% of its earnings in the form of a dividend. As a group, “Managed Health Care” companies pay a dividend yield of 1.0% and pay out 21.2% of their earnings in the form of a dividend.

Summary

Aetna beats its competitors on 9 of the 15 factors compared.

Aetna Company Profile

Aetna Inc. is a diversified healthcare benefits company. The Company operates through three segments: Health Care, Group Insurance and Large Case Pensions. It offers a range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, Medicaid healthcare management services, Medicare Advantage and Medicare Supplement plans, workers’ compensation administrative services and health information technology (HIT) products and services. The Health Care segment consists of medical, pharmacy benefit management services, dental, behavioral health and vision plans offered on both an Insured basis and an employer-funded basis, and emerging businesses products and services. The Group Insurance segment includes group life insurance and group disability products. Its products are offered on an Insured basis.

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