AET  Aetna Inc.

Exchange

NYSE

Sector

Health Care

Industry

Hospital And Medical Service Plans

Market Cap.

51.29B

Current Price

$154.45
-1.36 (-0.87%)

Book Price

$99.16
Overvalued by 35.80%
Financial Institution

Company Metrics

  • P/E 34.28
  • P/S 0.83
  • P/B 3.36
  • EPS 4.51
  • Dividend 2.00 / 1.28 %
  • Avg. Vol. 1.94M
  • Shares 332.08M
  • Market Cap. 51.29B

Company Description

Aetna Inc. operates as a diversified health care benefits company in the United States. It offers a range of health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life, and disability plans, as well as medical management capabilities and Medicaid health care management. The company operates in three segments: Health Care, Group Insurance, and... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Apple Inc. (AAPL) Finds Its Latest Catalyst in Aetna Inc (AET)
Investorplace.com - Aug 15, 2017
Maybe the Apple Inc. (NASDAQ:AAPL) Watch isn't such a dud after all. Despite slow early sales after its April 2015 debut, and little to no impact on AAPL stock, the Apple Watch has been steadily gaining traction in the wearable technology market of late.
Report: Aetna Meets With Apple To Discuss Apple Watch Distribution - Hartford Courant
Apple, Aetna Consider Bringing Apple Watch to 23 Million Aetna Customers - TheStreet.com
Apple and Aetna met last week to talk about the Apple Watch—here's what they ...
CNBC - Aug 17, 2017
Apple and Aetna held a series of meetings last week to discuss the next steps for the partnership. Mandi Bishop was one of the health influencers invited to the event.
Free Apple Watches? Aetna's Considering It - Madison.com
CNBC reveals what Apple and Aetna discussed about the Watch - Seeking Alpha
Aetna in talks with Apple to offer Apple Watch to its 23 million members: report
MarketWatch - Aug 14, 2017
Apple Inc. AAPL, -0.23% and insurance company Aetna Inc. AET, -0.87% held talks late last week to bring Apple's fitness-tracking smartwatch to Aetna's 23 million members, according to a report from CNBC on Monday, citing unnamed sources.
Aetna trumps 2Q expectations after scaling back ACA coverage
ABC News - Aug 3, 2017
Aetna on Thursday joined competitors like UnitedHealth Group Inc. and the Blue Cross-Blue Shield insurer Anthem Inc. in easily beating second-quarter expectations and hiking its 2017 forecast. The insurer's quarterly earnings jumped to $1.2 billion ...
Aetna CEO Says Congress Must Fix Obamacare - Hartford Courant
Health Insurer Aetna Profit Rises as Obamacare Business Shrinks - New York Times
Aetna Inc. (AET) Ownership Up in Latest Report from Winton Group Ltd
ExpressNewsline - 18 hours ago
FTB Advisors Inc. now owns 977 shares of the company's stock valued at $125,000 after buying an additional 97 shares in the last quarter.
Latest figures makes these Stock Even More Attractive: Aetna Inc. (AET ... - StockNewsJournal
Winton Group Ltd Bought A Little More Aetna Inc. (AET) Stock - Modern Readers
Aetna Facing Lawsuit From Shareholders Over ACA Pullout Decision
Hartford Courant - Jul 28, 2017
An institutional shareholder has filed a lawsuit against Aetna Inc., alleging the Hartford-based insurer breached its fiduciary duty by withdrawing from 11 public health insurance exchanges established under the Affordable Care Act.
Aetna crushes earnings
Business Insider - Aug 3, 2017
(Reuters) - No. 3 U.S. health insurer Aetna Inc reported a much higher-than-expected quarterly profit on Thursday on strong cost controls and improved performance in its core businesses.
Health insurer Aetna smashes profit estimates, raises forecast - STLtoday.com
Apple to Solidify Wearable Biz With Aetna Deal; Vapes Lift Tobacco Abroad -ICYMI
TheStreet.com - Aug 16, 2017
Insurer Aetna Inc. (AET) is making Apple Watches available to employees of its largest corporate customers, a source tells TheStreet's Chris Nolter, highlighting the importance of health and fitness to Apple's line of smartwatches.
Aetna Inc Announces 47% Advance In Q2 Bottom Line
Nasdaq - Aug 3, 2017
(RTTNews.com) - Aetna Inc ( AET ) reported a profit for its second quarter that advanced from last year. The company said its bottom line totaled $1.15 billion, or $3.42 per share.
Aetna Faces Investor Suit Over ACA Marketplace Withdrawal
Law360 (subscription) - Jul 26, 2017
Law360, Philadelphia (July 26, 2017, 6:18 PM EDT) -- Aetna Inc. was slapped with a putative class action in Pennsylvania state court on Tuesday alleging that it cost investors $1.7 billion by withdrawing from Affordable Care Act insurance exchanges to ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for AET to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate AET's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

Poor Cash Return on Invested Capital over the past 5 years

AET has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

AET has only created $- of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow - - - - -
divided by
Invested Capital 41.49B 49.87B 53.40B 53.42B 69.15B
Cash ROIC - - - - -

Satisfactory Return on Equity over the past 5 years

AET has generated adequate returns with capital that shareholders have invested. This is sufficient and implies that management performance has been good.

AET has generated $14.24 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.66B 1.91B 2.04B 2.39B 2.27B
divided by
Stockholders' Equity 10.41B 14.03B 14.48B 16.11B 17.88B
Return on Equity 15.93% 13.64% 14.09% 14.83% 12.70%

Poor Business Performance over the past 10 years

AET's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

AET has been losing money for the majority of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow - - - - - - - - - -

Low or No Reinvestment of Profits over the past 10 years

AET has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to AET operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 10.14B 9.72B 10.26B 10.40B 10.35B 10.34B 10.56B 11.05B 12.80B 14.72B
Retained Earnings Growth - -4.16% 5.56% 1.42% -0.53% -0.03% 2.04% 4.70% 15.80% 15.00%

Highly Competitive Industry over the past 10 years

It's likely that AET is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely AET invests heavily in R&D and Sales, General & Administrative expenses.

Only $- of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.83B 1.38B 1.28B 1.77B 1.99B 1.66B 1.91B 2.04B 2.39B 2.27B
divided by
Revenue - - - - - - - - - -
Net Profit Margin - - - - - - - - - -

Weak Pricing Power over the past 10 years

AET is likely in a highly competitive industry, due to low barriers to entry. It's because of this, that AET has been unable to raise prices and increase their profitability. This puts them in a poor position if inflation becomes an issue, as they would struggle to pass higher costs onto consumers.

Only $- of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit - - - - - - - - - -
divided by
Revenue - - - - - - - - - -
Gross Margin - - - - - - - - - -

Low Capital Intensity over the past 10 years

AET has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that AET may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

-% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure - - - - - - - - - -
divided by
Net Income 1.83B 1.38B 1.28B 1.77B 1.99B 1.66B 1.91B 2.04B 2.39B 2.27B
Capital Expenditure Ratio - - - - - - - - - -

Very Strong Dividend History over the past 10 years

AET has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests AET is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 20.00M 18.40M 17.30M 16.10M 167.20M 239.10M 278.70M 320.60M 348.70M 351.00M
divided by
Shares Outstanding 527.67M 489.08M 449.50M 422.90M 380.20M 345.00M 359.20M 359.10M 352.60M 354.30M
Dividend Paid Per Share 0.04 0.04 0.04 0.04 0.44 0.69 0.78 0.89 0.99 0.99
Price at Year End 56.73 28.83 31.61 29.95 42.02 45.56 68.15 90.14 108.93 124.01
Dividend Yield 0.07% 0.13% 0.12% 0.13% 1.05% 1.52% 1.14% 0.99% 0.91% 0.80%

Strong History of Stock Buybacks over the past 10 years

AET has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 527.67M 489.08M 449.50M 422.90M 380.20M 345.00M 359.20M 359.10M 352.60M 354.30M
Stock Bought Back - 7.89% 8.81% 6.29% 11.23% 10.20% -3.95% 0.03% 1.84% -0.48%
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