Critical Contrast: Anthem (ANTX) versus Its Rivals

Anthem (NASDAQ:ANTX) is one of 224 publicly-traded companies in the “Pharmaceutical preparations” industry, but how does it contrast to its peers? We will compare Anthem to similar businesses based on the strength of its earnings, valuation, profitability, dividends, institutional ownership, analyst recommendations and risk.

Profitability

This table compares Anthem and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Anthem	N/A	-55.04%	-49.13%
Anthem Competitors	-4,803.12%	-250.26%	-48.16%

Earnings and Valuation

This table compares Anthem and its peers revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Anthem	N/A	-$35.17 million	-3.74
Anthem Competitors	$335.36 million	-$27.03 million	-4.54

Anthem’s peers have higher revenue and earnings than Anthem. Anthem is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

90.5% of Anthem shares are held by institutional investors. Comparatively, 32.5% of shares of all “Pharmaceutical preparations” companies are held by institutional investors. 24.5% of Anthem shares are held by insiders. Comparatively, 14.7% of shares of all “Pharmaceutical preparations” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Anthem and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Anthem	1	0	1	0	2.00
Anthem Competitors	2223	2459	4371	67	2.25

Anthem currently has a consensus price target of $2.00, suggesting a potential downside of 53.92%. As a group, “Pharmaceutical preparations” companies have a potential upside of 149.43%. Given Anthem’s peers stronger consensus rating and higher possible upside, analysts clearly believe Anthem has less favorable growth aspects than its peers.

Risk and Volatility

Anthem has a beta of -1.31, indicating that its stock price is 231% less volatile than the S&P 500. Comparatively, Anthem’s peers have a beta of 12.16, indicating that their average stock price is 1,116% more volatile than the S&P 500.

Summary

Anthem peers beat Anthem on 7 of the 13 factors compared.

About Anthem

Anthem, Inc., through its subsidiaries, operates as a health benefits company in the United States. It operates through three segments: Commercial & Specialty Business, Government Business, and Other. The company offers a spectrum of network-based managed care health benefit plans to large and small group, individual, Medicaid, and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; traditional indemnity plans and other hybrid plans, such as consumer-driven health plans; and hospital only and limited benefit products. The company also provides a range of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs, and other administrative services. In addition, it offers an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits, radiology benefit management, and analytics-driven personal health care guidance; and Medicare administrative services. Further, the company provides services to the federal government in connection with the Federal Employee Program; and operates as a licensee of the Blue Cross and Blue Shield Association. As of December 31, 2017, it served 40.2 million medical members through its affiliated health plans. The company was formerly known as WellPoint, Inc. and changed its name to Anthem, Inc. in December 2014. Anthem, Inc. was founded in 1944 and is headquartered in Indianapolis, Indiana.