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Humana Raises Dividend 12% After Mixed Q4 Results

Humana Inc. (HUM) is a leading health and wellbeing company focused on care delivery and health plan administration. As of December 31, 2020, the company had approximately 17 million members in its medical benefit plans as well as approximately five million members of its specialty products.

The company generated 96% of its revenue from premiums and the remainder from services and investment income in 2020. Within the premiums segment, the company generated 90% of its revenue from Retail, 9% of its revenue from Group and Specialty and the remainder from Corporate. And within the Retail segment, the company generated most of its revenue from Individual Medicare Advantage (68.0%) and Group Medicare Advantage (10%) in 2020.

In terms of its segments, the company generated 35.6% of its revenue from Military Services, 10.1% from Florida, 6.0% of Texas and 4.5% from Kentucky in 2020.

Strong Q4 Results, but Lower Guidance

Humana reported fourth quarter revenue that rose 16.3% to $18.96 billion, beating consensus estimates by $200 million, with a non-GAAP EPS loss of $2.30, which was two cents better than analysts expected to see for the quarter. Management expects non-GAAP earnings of $21.25 to $21.75 for FY 2021, which was lower than the $21.76 per share consensus estimate.

Management warned of potential cost increases and a fall in revenue moving forward due to complications caused by the COVID-19 pandemic, but expressed optimism in its ability to advance long-term strategic objectives and grow the business.

The company raised its quarterly dividend by 12% to $0.70 per share, which represents a 0.69% forward yield. The dividend is payable on April 30, 2021, to shareholders on record as of March 31, 2021.

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