Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- HUM's revenue growth trails the industry average of 26.1%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- HUM's debt-to-equity ratio is very low at 0.19 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.46, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 337.92% to $706.00 million when compared to the same quarter last year. In addition, HUMANA INC has also vastly surpassed the industry average cash flow growth rate of 35.48%.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, HUMANA INC's return on equity exceeds that of both the industry average and the S&P 500.
Humana Inc. operates as a health care company that offers a range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being. The company has a P/E ratio of 9.2, above the average health services industry P/E ratio of 9 and below the S&P 500 P/E ratio of 17.7. Humana has a market cap of $10.94 billion and is part of the
industry. Shares are down 20.2% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.