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If You Invested $1000 in Elevance Health a Decade Ago, This is How Much It'd Be Worth Now

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

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 Elevance Health (ELV - Free Report) ten years ago? It may not have been easy to hold on to ELV for all that time, but if you did, how much would your investment be worth today?

Elevance Health's Business In-Depth

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

Based in Indianapolis, IN, Elevance Health is one of the largest publicly traded health insurers in the United States, in terms of membership. The company was previously named Anthem, Inc.  Effective Jun 27, 2022, the corporate name was changed to Elevance Health and began trading under the ticker “ELV” on Jun 28. Before Anthem, it was named WellPoint Inc.

The company is an independent licensee of the Blue Cross Blue Shield Association (BCBSA). As of Jun 30, 2022, it catered to 47 million medical members through its affiliated health plans. With the latest name change the company announced its intention to rejig its brand portfolio. The company is expected to organize its brand portfolio into Anthem Blue Cross/Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon core got-to-market brands.

Elevance Health currently operates through four reportable segments:

Government Business (62.2% of 2022 Net Revenues): The segment consists of the Medicaid, Medicare businesses and National Government Services. It offers services to the federal government through the FEHB program.

Commercial & Specialty Business (26.8%): The segment covers the Group risk-based and fee-based, Individual and BlueCard businesses. It offers administrative managed care services to the fee=based clients. Furthermore, this unit offers products like vision, dental, life, disability and supplemental health insurance benefits.

CarelonRx (18.3%): The IngenioRx segment includes the company’s PBM business, which began its operations in the second quarter of 2019. IngenioRx markets and offers PBM services to health plan clients as well as external customers. The PBM service portfolio incorporates services like pharmacy networks, formulary management, prescription drug database, member services and others.

Other (8.5%): This comprises Carelon, the Diversified Business Group, which focuses on reducing expenses and improve healthcare quality. It builds new care delivery and payment models to serve people with chronic conditions.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Elevance Health ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in April 2013 would be worth $7,111.93, or a 611.19% gain, as of April 10, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 164.28% and gold's return of 23.71% over the same time frame.

Looking ahead, analysts are expecting more upside for ELV.

Elevance Health's shares have outperformed its industry in a year. Its improving top line can be attributed to premium rate increases and higher memberships. Acquisitions, collaborations and product expansions have enabled the company to strengthen its business portfolio. Its well-performing Medicare and Medicaid businesses, coupled with several contract wins, are expected to drive its membership going ahead. Growing premiums, stemming from rate increases are aiding the company's results. Elevance Health utilizes excess capital to boost shareholder value. However, the company's escalating expenses continue to put pressure on margins. Its declining cash flows are also concerning. ELV's balance sheet with a massive debt of more than $22.3 billion can affect financial flexibility. As such, the stock warrants a cautious stance.

The stock is up 6.38% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2023. The consensus estimate has moved up as well.

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