7 Cheap Blue Chip Stocks to Invest in Now

4. Elevance Health, Inc. (NYSE:ELV)

Forward P/E Ratio: 14.49

Earnings Growth This Year: 12.40%  

Number of Hedge Fund Holders: 73 

Elevance Health, Inc. (NYSE:ELV) is a health insurance company in the United States. The company operates through its subsidiaries and manages Blue Cross and Blue Shield plans in 14 states with licenses to sell health insurance throughout the country. It offers various health plans for corporate groups and individuals including employer-sponsored plans, Medicare, and Medicaid.

The strategic moat of the company originates from its healthy mix of revenue streams and unique growth drivers such as Pharmacy Benefit Management (PBM) and Specialty pharmacies. Moreover, Elevance Health, Inc.’s (NYSE:ELV) Health Benefit segment which comprises Anthem and Wellpoint reached approximately 46 million members contributing more than $13.3 billion during the second quarter of 2024.

The second quarter earnings demonstrate the company’s ability to generate revenue from its product mix. The overall operating revenue of the company grew 2.2% year-over-year to reach $37.2 billion, with operating margins improving 20 base points during the same time.

Looking ahead, management remains focused on optimizing its Health Benefits program further to attain its pre-pandemic margins back. The reaffirmed adjusted diluted EPS of at least $37.2 reflects a 12% gain over the previous year.

It is one of the cheap blue chip stocks to invest in now. ELV is trading at 14 times its forward earnings with analysts expecting its earnings to grow by 12% during the year.

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%.”