AET  Aetna Inc.

Exchange

NYSE

Sector

Health Care

Industry

Hospital And Medical Service Plans

Market Cap.

44.06B

Current Price

$125.27
-4.22 (-3.26%)

Book Price

$94.16
Overvalued by 24.84%
Financial Institution

Company Metrics

  • P/E 19.54
  • P/S 0.72
  • P/B 2.55
  • EPS 6.41
  • Dividend 1.00 / 0.77 %
  • Avg. Vol. 3.16M
  • Shares 351.72M
  • Market Cap. 44.06B

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

Aetna, Humana Abandon $37 Billion Merger Blocked by Judge
Bloomberg - Feb 14, 2017
Aetna Inc. ended its $37 billion takeover of Humana Inc., after deciding not to appeal a ruling by a federal judge who blocked the health insurers' combination on antitrust grounds.
Aetna, Humana drop merger; Cigna wants to end Anthem deal - Reuters
Aetna Inc (AET), Humana Inc (HUM) Call Off $34 Billion Mega Merger - Investorplace.com
Aetna offers no guarantees about ACA future beyond 2017
The Seattle Times - Jan 31, 2017
FILE - In this Tuesday, Aug. 19, 2014, file photo, a pedestrian walks past a sign for Aetna Inc., at the company headquarters in Hartford, Conn.
Aetna Discussing Boston Move With Massachusetts Officials - Hartford Courant
Aetna beats on higher premiums - Business Insider
Raymond James Financial Services Advisors Inc. Boosts Position in Aetna Inc. (AET)
BNB Daily (blog) - 7 hours ago
Aetna logo Raymond James Financial Services Advisors Inc. boosted its position in shares of Aetna Inc. (NYSE:AET) by 0.3% during the fourth quarter, according to its most recent filing with the Securities and Exchange Commission.
Artisan Partners Limited Partnership Acquires Shares of 221814 Aetna Inc. (AET) - The Cerbat Gem
The Aetna Inc. (AET) Shares Sold by the Rehmann Capital Advisory Group - DailyQuint
Aetna fattens shareholder payout after Humana deal fails
ABC News - Feb 17, 2017
FILE - In this Tuesday, Aug. 19, 2014, file photo, a pedestrian walks past a sign for Aetna Inc., at the company headquarters in Hartford, Conn.
Aetna CEO: Obamacare in 'Death Spiral'
Bloomberg - Feb 15, 2017
Aetna Inc. Chief Executive Officer Mark Bertolini escalated his criticism of the Affordable Care Act, saying Obamacare's markets are nearing failure as premiums climb and healthier individuals drop out.
Aetna CEO says Obamacare individual plans are in 'death spiral' - Reuters
Aetna CEO: Obamacare In A 'Death Spiral' Heading Into 2018 - Hartford Courant
Lifshitz & Miller LLP Announces Investigation of Aetna Inc., GenVec, Inc ...
Yahoo Finance - Feb 17, 2017
Lifshitz & Miller announces an investigation into possible breaches of fiduciary duties by the board of XXIA in connection with the sale of XXIA to Keysight Technologies, Inc. for $19.64 per share. For more information about our investigation, please ...
SHAREHOLDER ALERT: Levi & Korsinsky, LLP Reminds Investors of Aetna Inc. of a ...
GlobeNewswire (press release) - Feb 13, 2017
To: All persons or entities who purchased or otherwise acquired securities of Aetna Inc. (NYSE:AET) between August 15, 2016 through January 20, 2017.
Lawsuit for Investors in Aetna Inc (NYSE: AET) Shares Announced by ...
Yahoo Finance - Feb 7, 2017
SAN DIEGO, CA / ACCESSWIRE / February 7, 2017 / The Shareholders Foundation, Inc. announces that a lawsuit was filed for certain purchasers of shares of Aetna Inc (AET) over alleged Securities Laws Violations by Aetna Inc. Investors, who purchased ...
Shareholder Class Action Filed Against Aetna Inc. - AET
PR Newswire (press release) - Jan 31, 2017
RADNOR, Pa., Jan. 31, 2017 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP announces that a shareholder class action lawsuit has been filed against Aetna Inc. (NYSE: AET) ("Aetna" or the "Company") on behalf of purchasers of the ...
SHAREHOLDER ALERT: Class Action Lawsuit Filed Against Aetna Inc. - AET
Yahoo Finance - Feb 3, 2017
RADNOR, PA / ACCESSWIRE / February 3, 2017 / The law firm of Kessler Topaz Meltzer & Check, LLP alerts Aetna Inc. (AET) ("Aetna" or the "Company") shareholders that a class action lawsuit has been filed on behalf of purchasers of the Company's ...
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
20112012201320142015
Free Cash Flow - - - - -
divided by
Invested Capital 38.59B 41.49B 49.87B 53.40B 53.42B
Cash ROIC - - - - -

Excellent Return on Equity over the past 5 years

Over the past 5 years, AET has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

AET has generated $15.62 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 1.99B 1.66B 1.91B 2.04B 2.39B
divided by
Stockholders' Equity 10.12B 10.41B 14.03B 14.48B 16.11B
Return on Equity 19.62% 15.93% 13.64% 14.09% 14.83%

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
2006200720082009201020112012201320142015
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
2006200720082009201020112012201320142015
Retained Earnings 9.40B 10.14B 9.72B 10.26B 10.40B 10.35B 10.34B 10.56B 11.05B 12.80B
Retained Earnings Growth - 7.80% -4.16% 5.56% 1.42% -0.53% -0.03% 2.04% 4.70% 15.80%

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
2006200720082009201020112012201320142015
Net Income 1.70B 1.83B 1.38B 1.28B 1.77B 1.99B 1.66B 1.91B 2.04B 2.39B
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
2006200720082009201020112012201320142015
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
2006200720082009201020112012201320142015
Capital Expenditure - - - - - - - - - -
divided by
Net Income 1.70B 1.83B 1.38B 1.28B 1.77B 1.99B 1.66B 1.91B 2.04B 2.39B
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
2006200720082009201020112012201320142015
Dividend Paid 20.80M 20.00M 18.40M 17.30M 16.10M 167.20M 239.10M 278.70M 320.60M 348.70M
divided by
Shares Outstanding 569.13M 527.67M 489.08M 449.50M 422.90M 380.20M 345.00M 359.20M 359.10M 352.60M
Dividend Paid Per Share 0.04 0.04 0.04 0.04 0.04 0.44 0.69 0.78 0.89 0.99
Price at Year End 42.30 56.73 28.83 31.61 29.95 42.02 45.56 68.15 90.14 108.93
Dividend Yield 0.09% 0.07% 0.13% 0.12% 0.13% 1.05% 1.52% 1.14% 0.99% 0.91%

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
2006200720082009201020112012201320142015
Shares Outstanding 569.13M 527.67M 489.08M 449.50M 422.90M 380.20M 345.00M 359.20M 359.10M 352.60M
Stock Bought Back - 7.86% 7.89% 8.81% 6.29% 11.23% 10.20% -3.95% 0.03% 1.84%
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