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5 Best Dental Insurance Stocks To Buy Heading Into 2019

It’s been a good year for dental insurance stocks and that doesn’t figure to change in 2019 or beyond. Spending on Medicare and Medicaid, both of which include limited forms of dental coverage in certain cases, is expected to grow at annual rates of 7.9% and 5.9% respectively through 2023, with total expenditures of close to $2 trillion within five years.

More importantly, there’s a lot of room for growth as it relates specifically to dental insurance coverage by Medicare/Medicaid, as a lot of Americans are still out of luck when it comes to dental insurance. According to the National Association of Dental Plans, there were more than 126 million Americans without any dental coverage as of 2014.

In the case of traditional Medicare, there is very limited coverage that only applies in cases where dental work is needed in conjunction with another procedure that is covered. And while dental coverage for children under 18 was considered an essential benefit, parents are not actually forced to buy it for their kids, even in family plans, which has naturally lead many to not do so. Medicare Advantage plans on the other hand may provide more robust dental coverage, including X-rays, oral exams, and teeth cleaning services. According to Avalere Health, 63% of those enrolled in Advantage plans had some level of dental coverage.

Nonetheless, it’s widely accepted that more needs to be done to meet the dental needs of Americans. Several agencies and advocacy groups are pushing for dental procedures to be included in Medicare, particularly for seniors. And while their efforts could ultimately prove fruitless, it’s not hard to the make the case that oral health is a vital and highly underrated component of one’s overall health, and that billions could be saved battling other conditions that result from, or are exacerbated by, poor oral health.

Data gathered by the Medical Expenditure Panel Survey in 2014 showed that health expenditures were far lower in patients with one of several chronic conditions when they had also undertaken preventative dental work at least once during the past year. When it came to patients with cancer and coronary heart disease, their medical costs were 67% higher if they had not undergone any preventative, far cheaper dental work in the last year.

Considering the health implications and additional costs of poor dental health, it would certainly make sense to see dental get expanded Medicare/Medicaid coverage in the future, which would be nothing but good news for dental insurance stocks.

Either way, dental and health insurers appear poised for a bright future.  Authority Dental compared top dental insurance companies from the perspective of users and included Cigna, Humana, and MetLife among its top 5 choices. However, we are going to take a look at the popularity of dental insurance stocks among the 700+ hedge funds tracked by Insider Monkey.

We’ve uncovered a reliable way to consistently beat the market by studying hedge funds’ 13F filings and investing in only the top consensus picks of the 100 best performing hedge funds each quarter. Insider Monkey’s flagship “Best Performing Hedge Funds Strategy” has returned 96.9% since its 2014 inception (through November 2), beating the market by over 40 percentage points. Check out a detailed analysis of Insider Monkey’s performance and past quarterly stock picks for all the details.

 

  1. MetLife, Inc. (NYSE:MET)

Hedge Funds Long MET (as of September 30): 24
Value of Hedge Funds’ MET Holdings (as of September 30): $1.16 billion

Year-to-Date Returns: -12.4%

Noteworthy Shareholders: Ric Dillon’s Diamond Hill Capital, Richard S. Pzena’s Pzena Investment Management

 

  1. Humana Inc. (NYSE:HUM)

 

Hedge Funds Long HUM (as of September 30): 44
Value of Hedge Funds’ HUM Holdings (as of September 30): $3.20 billion

Year-to-Date Returns: +27.06%

Noteworthy Shareholders: Jim Simons’ Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management

 

  1. Cigna Corporation (NYSE:CI)

 

Hedge Funds Long CI (as of September 30): 60
Value of Hedge Funds’ CI Holdings (as of September 30): $3.54 billion

Year-to-Date Returns: +5.51%

Noteworthy Shareholders: John Overdeck and David Siegel’s Two Sigma Advisors, Steve Cohen’s Point72 Asset Management

John Overdeck of Two Sigma

  1. UnitedHealth Group Incorporated (NYSE:UNH)

 

Hedge Funds Long UNH (as of September 30): 71
Value of Hedge Funds’ UNH Holdings (as of September 30): $6.42 billion

Year-to-Date Returns: +22.59%

Noteworthy Shareholders: Stephen Mandel’s Lone Pine Capital, Cliff Asness’ AQR Capital Management

 

  1. Aetna Inc. (NYSE:AET)

 

Hedge Funds Long AET (as of September 30): 79
Value of Hedge Funds’ AET Holdings (as of September 30): $11.79 billion

Year-to-Date Returns: +15.67%

Noteworthy Shareholders: Larry Robbins’ Glenview Capital, Israel Englander’s Millennium Management

Aetna is also the 21st most popular stock among hedge funds. Check out the list of 30 Most Popular Stocks Among Hedge Funds in Q3.

 

Disclosure: None. This article is originally published at Insider Monkey.

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