Humana Inc Reports Earnings Growth and Raises Dividend by 25%
HUM Stock Returning Cash to Investors
With a yield of less than one percent, Humana Inc (NYSE:HUM) may not be on the radar of most dividend investors. But given the company’s impressive dividend growth, HUM stock deserves more attention.
On Wednesday, February 7, Humana Inc announced that its Board of Directors has declared a quarterly cash dividend of $0.50 per share, representing a 25% increase from its previous payout of $0.40 per share. The dividend will be paid on April 27, 2018 to shareholders of record as of March 30. (Source: “Humana Reports Fourth Quarter 2017 Financial Results; Provides 2018 Financial Guidance,” Humana Inc, February 7, 2018.)
With the new dividend rate, Humana stock offers an annual yield of 0.76%.
The dividend hike is the latest sign of strength from the Louisville, Kentucky-based health insurance giant. Humana also reported earnings on Wednesday. Excluding one-time items, Humana generated $52.8 billion in consolidated revenue in full-year 2017, up three percent from 2016. Adjusted earnings came in at $11.71 per share for the year, representing a 7.2% increase from the prior year.
“We continue to make strong progress in advancing our integrated care strategy, especially in deepening our clinical capabilities through long-term platform investments in the home and primary care,” remarked Humana’s President and Chief Executive Officer, Bruce D. Broussard, in a statement on Wednesday. “And our focus on and commitment to improving the member experience continue to pay off as we this year saw significant improvement in our Stars results as well as our Net Promoter Scores which increased by 500 basis points.” (Source: Ibid.)
And the best could be yet to come. For full-year 2018, management expects the company to generate adjusted earnings of between $13.50 and $14.00 per share, which, at the midpoint, would represent a 17.4% increase from the $11.71 per share earned in 2017.
With growing profits, Humana Inc is well-positioned to continue raising its dividend.