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The following healthcare providers are all trading at great valuations and have beaten the market's performance over the last year. The 77.6 million baby boomers are beginning to retire and will contribute significantly to the profitability of the healthcare providers. Let's take a look at their fundamentals to see how they'll perform over the next five years.

Aetna (NYSE:AET) is a $15.79 billion large-cap Connecticut based healthcare provider. It pays a dividend of 1.6%. Aetna is undervalued with a forward PE of 8.56, a PEG of 0.71, and a price to book ratio of 1.51.

It rakes in $2.58 billion in operating cash flow and $3.12 billion in levered free cash flow. Aetna is expected to grow earnings annually at 12.05% for the next five years. It has 3 upward earnings revisions for 2012. When combining its dividend and annual expected earnings, Aetna should reward investors with a 13.65% total annual yield, which should easily beat the market's performance. I'll give it a price target of $76 by 2017.

Cigna (NYSE:CI) is a $12.4 billion large-cap Connecticut based healthcare provider with a small 0.10% dividend.

Cigna's undervaluation is highlighted by a forward PE of 8.15, a PEG of 0.85, and a price to book ratio of 1.61. It has a nice operating cash flow of $1.7 billion and $1.04 billion in levered free cash flow. Cigna is expected to grow earnings annually at 10.27% for the next five years. It has one downward earnings revision for 2012. Since I usually look for companies that will beat the market, I would avoid Cigna because it may only match the market's performance over the next five years. My price target for Cigna is $73 by 2017.

UnitedHealth Group (NYSE:UNH) is a $56.36 billion large-cap Minnesota based healthcare provider with a dividend of 1.2%.

UNH proudly displays its undervaluation with a forward PE of 9.64, a PEG of 0.94, and a price to book ratio of 1.99. It pulls in a serious operating cash flow of $6.97 billion and levered free cash flow of $3 billion. It has 6 upward earnings revisions for 2012 and two upward revisions for 2013. UNH is expected to grow earnings annually at 11.6% for the next five years. Its 12.8% total yield (dividend + earnings) will contribute to continued market beating performance for the next five years. I'll give it a price target of $90 by 2017.

Humana (NYSE:HUM) is a $15.01 billion large-cap Kentucky based healthcare provider with a 1.1% dividend.

Humana's undervaluation is apparent with a forward PE of 11.49, a PEG of 1.31, and a price to book ratio of 1.92. It brings in $3.83 billion in operating cash flow and $2.45 billion in levered free cash flow. It has an upward earnings revision for 2012 and is expected to grow earnings annually at 8.31% for the next five years. Humana's total yield of 9.41% may only match or even lag the market's performance. However, if it can manage to significantly beat its earnings expectations, I feel that Humana can edge higher than the market. I'll give it a price target of $136 by 2017.

Wellpoint (NYSE:WLP) is a $24.76 billion large-cap Indianapolis based healthcare provider paying a dividend of 1.4%.

Wellpoint shows its undervaluation with a forward PE of 9.18, a PEG of 1.1, and a price to book ratio of 1.06. It hauls in an operating cash flow of $3.9 billion and a levered free cash flow of $3.79 billion. It is expected to grow earnings annually at 9.21% for the next five years. I'll give it a price target of $110 by 2017. This is a stock that may only match the market's performance over the next five years unless it can consistently beat its earnings expectations.

Conclusion:

The aging baby boomer demographic will provide a steady source of income to these healthcare providers well into the future. Since I usually look for market beating performers, I like Aetna and UnitedHealth as standouts among this group as their earnings are expected to have an edge over the market.

Source: How These Undervalued Healthcare Providers Can Heal Your Portfolio