Taking everything into account, HUM scores 4 out of 10 in our fundamental rating. HUM was compared to 102 industry peers in the Health Care Providers & Services industry. While HUM is still in line with the averages on profitability rating, there are concerns on its financial health. HUM has a correct valuation and a medium growth rate. Finally HUM also has an excellent dividend rating.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year HUM was profitable.
In the past year HUM had a positive cash flow from operations.
HUM had positive earnings in each of the past 5 years.
HUM had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

HUM's Return On Assets of 2.60% is fine compared to the rest of the industry. HUM outperforms 62.75% of its industry peers.
The Return On Equity of HUM (6.97%) is better than 63.73% of its industry peers.
HUM has a better Return On Invested Capital (5.89%) than 61.76% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HUM is in line with the industry average of 9.21%.

		Industry Rank	Sector Rank
ROA	2.6%
ROE	6.97%
ROIC	5.89%

ROA(3y)4.8%

ROA(5y)6.13%

ROE(3y)13.67%

ROE(5y)16.75%

ROIC(3y)7.86%

ROIC(5y)8.6%

1.3 Margins

HUM has a Profit Margin (1.02%) which is in line with its industry peers.
HUM's Profit Margin has declined in the last couple of years.
HUM has a Operating Margin of 2.71%. This is comparable to the rest of the industry: HUM outperforms 52.94% of its industry peers.
In the last couple of years the Operating Margin of HUM has declined.

		Industry Rank	Sector Rank
OM	2.71%
PM (TTM)	1.02%
GM	N/A

OM growth 3Y-13.15%

OM growth 5Y-12.08%

PM growth 3Y-33.79%

PM growth 5Y-24.48%

GM growth 3YN/A

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

HUM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, HUM has less shares outstanding
The number of shares outstanding for HUM has been reduced compared to 5 years ago.
The debt/assets ratio for HUM is higher compared to a year ago.

2.2 Solvency

HUM has a debt to FCF ratio of 8.15. This is a slightly negative value and a sign of low solvency as HUM would need 8.15 years to pay back of all of its debts.
HUM's Debt to FCF ratio of 8.15 is in line compared to the rest of the industry. HUM outperforms 52.94% of its industry peers.
A Debt/Equity ratio of 0.68 indicates that HUM is somewhat dependend on debt financing.
HUM has a Debt to Equity ratio of 0.68. This is comparable to the rest of the industry: HUM outperforms 55.88% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.68
Debt/FCF	8.15
Altman-Z	N/A

ROIC/WACC0.69

WACC8.49%

2.3 Liquidity

		Industry Rank	Sector Rank
Current Ratio	N/A
Quick Ratio	N/A

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

HUM shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.78%.
Measured over the past years, HUM shows a decrease in Earnings Per Share. The EPS has been decreasing by -1.92% on average per year.
HUM shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.87%.
HUM shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.66% yearly.

EPS 1Y (TTM)3.78%

EPS 3Y-7.76%

EPS 5Y-1.92%

EPS Q2Q%-22.12%

Revenue 1Y (TTM)9.87%

Revenue growth 3Y12.34%

Revenue growth 5Y12.66%

Sales Q2Q%11.43%

3.2 Future

The Earnings Per Share is expected to grow by 18.79% on average over the next years. This is quite good.
HUM is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.32% yearly.

EPS Next Y6.41%

EPS Next 2Y-12.65%

EPS Next 3Y6.85%

EPS Next 5Y18.79%

Revenue Next Year10.43%

Revenue Next 2Y11.33%

Revenue Next 3Y10.19%

Revenue Next 5Y8.32%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 14.07 indicates a correct valuation of HUM.
Compared to the rest of the industry, the Price/Earnings ratio of HUM indicates a rather cheap valuation: HUM is cheaper than 83.33% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.32. HUM is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 21.55, which indicates a rather expensive current valuation of HUM.
HUM's Price/Forward Earnings ratio is in line with the industry average.
HUM's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.32.

		Industry Rank	Sector Rank
PE	14.07
Fwd PE	21.55

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HUM indicates a somewhat cheap valuation: HUM is cheaper than 75.49% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HUM indicates a somewhat cheap valuation: HUM is cheaper than 67.65% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	20.7
EV/EBITDA	9.15

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HUM does not grow enough to justify the current Price/Earnings ratio.

PEG (NY)2.2

PEG (5Y)N/A

EPS Next 2Y-12.65%

EPS Next 3Y6.85%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.25%, HUM has a reasonable but not impressive dividend return.
HUM's Dividend Yield is rather good when compared to the industry average which is at 0.59. HUM pays more dividend than 88.24% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 1.83, HUM is paying slightly less dividend.

		Industry Rank	Sector Rank
Dividend Yield	1.25%

5.2 History

On average, the dividend of HUM grows each year by 10.32%, which is quite nice.
HUM has paid a dividend for at least 10 years, which is a reliable track record.
As HUM did not decrease their dividend in the past 5 years, we can say the dividend looks stable.

Dividend Growth(5Y)10.32%

Div Incr Years0

Div Non Decr Years8

5.3 Sustainability

33.23% of the earnings are spent on dividend by HUM. This is a low number and sustainable payout ratio.
HUM's earnings are growing more than its dividend. This makes the dividend growth sustainable.

DP33.23%

EPS Next 2Y-12.65%

EPS Next 3Y6.85%

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HUMANA INC / HUM FAQ

What is the fundamental rating for HUM stock?

ChartMill assigns a fundamental rating of 4 / 10 to HUM.

What is the valuation status for HUM stock?

ChartMill assigns a valuation rating of 4 / 10 to HUMANA INC (HUM). This can be considered as Fairly Valued.

What is the profitability of HUM stock?

HUMANA INC (HUM) has a profitability rating of 4 / 10.

Can you provide the financial health for HUM stock?

The financial health rating of HUMANA INC (HUM) is 2 / 10.

How sustainable is the dividend of HUMANA INC (HUM) stock?

The dividend rating of HUMANA INC (HUM) is 7 / 10 and the dividend payout ratio is 33.23%.