Cigna: Many Reasons To Invest

Summary

• Cigna is growing rapidly and earnings per share have increased 13% annually over the past 4 years.
• The long-term outlook is also positive: Cigna is targeting annual EPS growth between 10% and 13%.
• About 20% of cash flow from operations is spent on dividends and about 70% on share repurchases and strategic mergers and acquisitions, further increasing shareholder value.
• About 68% of free cash flow is used to distribute dividends and repurchase shares. Its shareholder return policy is sustainable over the long term.
• Since Cigna expects to grow between 10% and 13% annually, investors can expect annual returns in the mid-teens.

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Introduction

One of the insurance companies in my stock portfolio is Cigna (NYSE:CI). Companies with growing (and predictable) sales and profits like Cigna fit well into my portfolio. The premiums paid to insurers are used to purchase bonds, which could increase the float. A

Analyst’s Disclosure:I/we have a beneficial long position in the shares of CI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.