Is CI a good stock to buy? We came across a bullish thesis on The Cigna Group on Quality At A Fair Price’s Substack. In this article, we will summarize the bulls’ thesis on CI. The Cigna Group’s share was trading at $279.92 as of April 20th. CI’s trailing and forward P/E were 12.62 and 9.23, respectively according to Yahoo Finance.
The Cigna Group (CI) is a global health insurance and services provider operating through key segments such as Cigna Healthcare and Evernorth Health Services, serving millions of customers worldwide. Despite its scale and diversified operations, the company’s dividend profile remains relatively young, with meaningful growth only beginning in 2021 after years of maintaining a nominal $0.04 annual payout. Since then, dividend expansion has accelerated significantly, reflecting improved capital return priorities and stronger underlying cash flow generation.
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Currently, the stock offers a yield of 2.16–2.17%, which stands above its 5-year average yield of 1.79%, suggesting that shares may be trading at a discount based on dividend yield theory. This spread implies an estimated undervaluation of roughly 17%, reinforcing the view that the market is not fully pricing in the company’s improving shareholder return profile. From a forward-looking perspective, this yield compression potential, combined with expected earnings growth, supports a projected forward return of approximately 12–13%, making the risk/reward profile attractive.
While the historical dividend growth track record is limited, recent increases indicate strong momentum, with double-digit growth rates in the past few years signaling management’s confidence in sustainable cash flows. Additionally, the company’s diversified business mix across insurance and health services provides resilience and earnings visibility, which underpins its ability to continue growing distributions. Overall, the combination of a relatively elevated yield versus historical norms, improving dividend growth trajectory, and solid earnings outlook positions the stock as a potentially undervalued opportunity with favorable long-term return potential.
Previously, we covered a bullish thesis on The Cigna Group (CI) by Antonio Linares in May 2025, which highlighted its PBM positioning, pricing power dynamics, and benefits from GLP-1 competition alongside strong buybacks and undervaluation. CI’s stock price has depreciated by approximately 10.47% since our coverage amid higher medical-cost pressures and regulatory scrutiny of pharmacy benefit managers, which weighed on investor sentiment despite otherwise solid operating performance. Quality At A Fair Price shares a similar view but emphasizes on dividend yield expansion, valuation discount, and forward return potential driven by cash flow strength.
The Cigna Group is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 83 hedge fund portfolios held CI at the end of the fourth quarter which was 78 in the previous quarter. While we acknowledge the risk and potential of CI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CI and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
