We want to have the return on invested capital higher than the weighted cost of capital.
The company has been increasing its dividend for 11 consecutive years, indicating the company has a strong committment to maintain and grow its dividend. This proved not to be in the best interests of the company, given the vagaries and uncertainties of the stock market. Financial strategy shifted from partnering on individual projects to relying on a public shareholder base. The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. Anthem (NYSE:ANTM) pays an annual dividend of 5.12 per share and currently has a dividend yield of 1.06. Find the editorial stock photo of Netherlands Players Line National Anthem Before, and more photos in the Shutterstock collection of editorial photography. In March of 1998, Anthem was listed on the Toronto Stock Exchange at a market cap of 100 million. Return on invested capital (ROIC) measures how well a company generates cash flow relative to the capital it has invested in its business. The 3-year average EBITDA growth rate is 14.6%, which ranks in the middle range of the companies in Healthcare Plans industry.Īnother way to look at the profitability of a company is to compare its return on invested capital and the weighted cost of capital. The 3-year average annual revenue growth rate of Anthem is 11.7%, which ranks in the middle range of the companies in Healthcare Plans industry. The faster a company is growing, the more likely it is to be creating value for shareholders, especially if the growth is profitable. GuruFocus research has found that growth is closely correlated with the long term performance of a company's stock. Growth is probably the most important factor in the valuation of a company. Anthem Stock Gives Every Indication Of Being Fairly Valued
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