Here's How Much You'd Have If You Invested $1000 in Cigna a Decade Ago

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Cigna (CI) ten years ago? It may not have been easy to hold on to CI for all that time, but if you did, how much would your investment be worth today?

Cigna's Business In-Depth

With that in mind, let's take a look at Cigna's main business drivers.

Headquartered in Bloomfield, CT and formed in 1982, Cigna Corp. is the result of a merger between Connecticut General Life Insurance Company and Insurance Company of North America. Cigna completed its combination with Express Scripts Holding Company by 2018-end. Shares of the new combined company have started trading on the NYSE under the stock ticker symbol “CI.”

The health service company updated its segment names to align with the launch of Evernorth and to better reflect a suite of services offered across its portfolio. With divesting its life, accident and supplemental benefits businesses to Chubb for $5.75 billion, it focuses more on the profitable global health services portfolio. The segment previously reported as Health Services is now reported as Evernorth and the segment previously reported as Integrated Medical is now reported as U.S Medical. There are no changes to the underlying businesses reported in either segment.

Evernorth (constitutes 92.2% of total revenues in 2021) includes a broad range of coordinated and point solution health services, including pharmacy services, benefits management, care solutions and data and analytics, which are provided to health plans, employers, government organizations, and health care providers.

Cigna Healthcare (7.8%): The segment comprises of Cigna's U.S. Commercial, U.S. Government, and International Health businesses that provide comprehensive medical and coordinated solutions to clients and customers.

Cigna's U.S. Commercial and U.S. Government businesses combined previously used to report as U.S. Medical. The businesses are retained by the company and reported in the newly created International Health operating segment that will be aggregated with its existing U.S. Commercial and U.S. Government operating segments in the renamed Cigna Healthcare reporting segment.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Cigna ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in August 2012 would be worth $6,400.49, or a gain of 540.05%, as of August 30, 2022, and this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 185.76% and gold's return of 0.83% over the same time frame.

Analysts are forecasting more upside for CI too.

Cigna’s revenues have been increasing consistently for the past few years, driven by acquisitions, superior operating performance and a high-quality product portfolio. Business streamlining by divesting its life, accident and supplemental benefits businesses to Chubb helps it to focus on core growth areas. Increasing medical membership on the back of a diversified product portfolio, wide agent network and superior service are major positives. It beat Q2 earnings on strong membership growth. It has been resorting to prudent capital deployment moves. For 2022, Cigna expects adjusted income from operations to be at least $22.90 per share. Shares have outperformed the industry year to date. However, high leverage can affect its financial flexibility. Rising operating costs might dent margins. As such, the stock warrants a cautious stance.

Shares have gained 5.04% over the past four weeks and there have been 10 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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