5 Best Health Insurance Stocks to Buy

In this article, we list down 5 of the best health insurance stocks to buy. If you want to go through our detailed analysis of the healthcare industry and its developments, go ahead and click on the 12 Best Health Insurance Stocks to Buy.

5. HCA Healthcare, Inc. (NYSE:HCA)

Number of Hedge Fund Holders: 66

Established in 1968, HCA Healthcare, Inc. (NYSE:HCA) is a prominent healthcare provider renowned for its extensive network. The company possesses ownership and operational control over 182 hospitals and around 2,300 ambulatory care sites, which encompass surgery centers, free-standing emergency rooms, urgent care centers, and physician clinics. These facilities are spread across 20 states in the United States and also extend into the United Kingdom.

On July 27, HCA Healthcare, Inc. (NYSE:HCA) unveiled its financial outcomes for Q2 2023, showcasing robust performance. The company witnessed a 7% year-on-year revenue increase, amounting to $15.9 billion, and a 2% year-on-year rise in net income, totaling $1.4 billion. Notably, its normalized EPS for the quarter stood at $4.29, surpassing consensus estimates by $0.05.

The number of hedge funds tracked by Insider Monkey owning stakes in HCA Healthcare, Inc. (NYSE:HCA) grew to 66 in Q2 2023, from 65 in the previous quarter. The collective value of these stakes is roughly $2.47 billion.

4. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 66

CVS Health Corporation (NYSE:CVS) is a healthcare enterprise headquartered in the United States, overseeing an extensive network of retail pharmacies and clinics throughout the country. The corporation manages various brands, including CVS Pharmacy, a retail pharmacy chain; CVS Caremark, a pharmacy benefits manager, and Aetna, a health insurance provider.

In a recent disclosure, CVS Health Corporation (NYSE:CVS) unveiled its Q2 outcomes, highlighting an adjusted EPS of $2.21 for the quarter, surpassing projections by $0.09. Additionally, the revenue for the period surged by a notable 10.3% compared to the prior year, amounting to $88.92 billion, exceeding estimates by $2.39 billion. The company currently offers a dividend of $0.60, boasting a yield of 3.37% as of October 16.

At the conclusion of the second quarter in 2023, Insider Monkey’s database, which tracks 943 hedge funds, reported that 66 hedge funds held stakes in CVS Health Corporation (NYSE:CVS). The primary stakeholder was John Overdeck and David Siegel’s Two Sigma Advisors, possessing a significant stake in the company valued at $398.9 million.

Coho Partners Relative Value Equity Fund made the following comment about CVS Health Corporation (NYSE:CVS) in its second quarter 2023 investor letter:

“In December of 2017, CVS Health Corporation (NYSE:CVS) agreed to buy Aetna, which broadened its offering by entering the managed care business. CVS has been moving its portfolio to a more value-based outcome model, and Aetna was a major move in that direction. We were willing to accept the leverage that came with the deal because CVS has a very cash generative model, and we anticipated the free cash flow would enable the company to de-lever fairly quickly.

By mid-2022, CVS was in a position to use the free cash flow that had been going to debt repayment to do bolt-on deals to further prepare for the value-based outcome model and/or return more cash to shareholders in the form of higher dividends or share repurchases. However, CVS lost a “star” in its largest Medicare plan in late 2022 and this will adversely impact earnings in 2024. This was a surprise and disappointment to us, but management should be able to regain the “star” in the back half of 2023, which will then give the company a nice tailwind in 2025…” (Click here to read the full text)

3. The Cigna Group (NYSE:CI)

Number of Hedge Fund Holders: 74

The Cigna Group (NYSE:CI), along with its subsidiary companies, specializes in providing insurance and related products and services within the United States. Additionally, it offers pharmacy benefits, home delivery pharmacy, and specialty pharmacy distribution.

The worldwide health services firm has consistently increased its dividends by an average annual rate of 160.6%. At present, The Cigna Group (NYSE:CI) provides a quarterly dividend of $1.23 per share, yielding 1.58% as of the record date on October 16.

As of the end of the second quarter of 2023, 74 hedge funds out of the 910 funds in Insider Monkey’s database had stakes in Cigna Corporation (NYSE:CI). Larry Robbins’s Glenview Capital is the company’s largest stakeholder, with 2.07 million shares worth $579.59 million.

2. Elevance Health, Inc. (NYSE:ELV)

Number of Hedge Fund Holders: 82

Formerly recognized as Anthem, Inc., Elevance Health, Inc. (NYSE:ELV) operates as a health benefits company within the United States through its subsidiaries. The company manages Blue Cross and/or Blue Shield plans in 14 states and holds licenses to sell health insurance nationwide. Elevance Health, Inc. (NYSE:ELV) competes in a similar space as UnitedHealth Group Incorporated (NYSE:UNH), providing a range of offerings such as employer-sponsored and individual health plans, Medicare Advantage, Medicare supplements, and Medicaid. Additionally, the company oversees the IngenioRx PBM, which constitutes just under 20% of the company’s total revenue.

At the end of the June quarter of 2023, 82 hedge funds in Insider Monkey’s database reported having stakes in Elevance Health, Inc. (NYSE:ELV), up from 81 in the preceding quarter. Their collective stake value is over $5.33 billion. The biggest stakeholder of Elevance Health, Inc. (NYSE:ELV) was Jean-Marie Eveillard’s First Eagle Investment Management which owns a $902 million stake in the company.

ClearBridge Large Cap Value Strategy made the following comment about Elevance Health, Inc. (NYSE:ELV) in its Q3 2023 investor letter:

“Our health care positioning also fared well. We continue to maintain an overweight position to managed care companies via long-term holdings in UnitedHealth and Elevance Health, Inc. (NYSE:ELV), as we believe the short cycle nature of their insurance franchises allows them to reprice their book of business in a relatively short time frame, even if health care costs come in higher than previously anticipated.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 111

UnitedHealth Group Incorporated (NYSE:UNH), based in Minnetonka, Minnesota, is a prominent American multinational corporation specializing in managed healthcare and insurance services, operating as a for-profit entity. The corporation is structured into four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. Ranked as the best health insurance stock on our list, UnitedHealth Group Incorporated (NYSE:UNH) declared a quarterly dividend of $1.88 per share on August 23, in line with the prior payout. The dividend was disbursed on September 19 to shareholders of record as of September 11.

Insider Monkey’s database of 910 hedge funds shows that 111 hedge funds reported owning stakes in UnitedHealth Group Incorporated (NYSE:UNH). The most significant stakeholder of the firm during this period was Rajiv Jain’s GQG Partners which owns a $2.4 billion stake in the company.

Mairs & Power Growth Fund made the following comment about UnitedHealth Group Incorporated (NYSE:UNH) in its second quarter 2023 investor letter:

“Notable detractors to performance in the first half were US Bank (USB), Charles Schwab (SCHW), and UnitedHealth Group Incorporated (NYSE:UNH), which were down 22.09%, 31.65%, and 8.65%, respectively. Another detractor from relative performance was UnitedHealth Group, which was down 8.65%. However, we have a positive long-term view of the company, headquartered in Minnesota, and especially its potential when it comes to harnessing its vast amounts of patient data via AI. Additionally, its Optum unit, which provides technology and data-driven care delivery, has AI-enabled tools that can help healthcare providers drive more efficient and accurate care to patients.

Disclosure: None. You can also take a look at Top 15 Cloud Computing Companies in the World and 15 Best Ex-Cop Jobs for Former Police Officers.