1. Elevance Health, Inc. (NYSE:ELV)
Number of Hedge Fund Holders: 73
Forward P/E as of October 23, 2024: 12.7
10 Year Revenue Growth Rate: 9.1%
Trailing 12 Month (TTM) Net Income (September 30): $6.42 Billion
Elevance Health, Inc. (NYSE:ELV) ranks first on our list of the most profitable value stocks to invest in. Formerly referred to as Anthem, Inc., Elevance Health is now a prominent health benefits company in the United States.
The company has been ensuring it provides customers with the best health plans ever since its inception. To maintain and strengthen its legacy, on October 1, Elevance Health, Inc. (NYSE:ELV) unveiled its 2025 Medicare Advantage Plans. The company intends to offer personalized medicare advantage plans to almost 40.3 million consumers across 23 states in the United States.
In the fiscal third quarter of 2024, Elevance Health, Inc. (NYSE:ELV) generated revenue worth $44.7 billion and an adjusted operating gain of $2.4 billion. Of this, its health benefits segment generated $38.3 billion in revenue, up by $1.5 billion year-over-year. The company also generated operating cash flow worth $2.7 billion, up by $0.1 billion year over year.
The company has a diversified portfolio that contributes to its ranking on our list, positioning it as a leader in the medicare plans business. Elevance Health, Inc. (NYSE:ELV) is a value stock with strong fundamentals, having grown its revenue by 9.1% over the past 10 years.
Artisan Partners’ Artisan Select Equity Fund stated the following regarding Elevance Health, Inc. (NYSE:ELV) in its Q2 2024 investor letter:
“The top contributors to performance for the quarter were Alphabet, Lam Research and Elevance Health, Inc. (NYSE:ELV). Elevance shares rose 5% during the quarter. The business has been performing well and has delivered good profit growth this year, despite a flat top line. It has largely navigated the challenges related to Medicaid redeterminations, which have caused temporary volatility in membership and health care utilization levels. Its vertical integration strategy is gaining traction, with strong revenue and profit growth at its Carelon Services business. Elevance’s shares are trading at 13X earnings, which is a very attractive investment proposition for a durable business that expects long-term earnings growth of over 12%.”
Overall, ELV ranks first among the 10 most profitable value stocks to invest in. While we acknowledge the potential of healthcare companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ELV but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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