CI - Cigna: An Up-And-Coming Dividend Growth Stock To Buy Now

2024-05-13 07:00:00 ET

Summary

• Cigna doesn't yet have the established dividend growth track record that I like to see, but it has everything else.
• The company's total revenue and non-GAAP EPS each surpassed analysts' expectations in Q1.
• Cigna's dividend is easily covered by free cash flow and the debt load is manageable.
• Shares of the managed care provider could be trading 15% below fair value.
• In my view, Cigna is likely to deliver double-digit annual total returns through 2026.

In dividend growth investing, well-established dividend growers tend to get quite a bit of attention. These are the Dividend Contenders (10-24 year dividend growth streaks), Dividend Aristocrats/Champions (25-plus year dividend growth streaks), and Dividend Kings (50+ year dividend growth streaks) of the investment universe. Since I and most other dividend growth investors are seeking consistency in investments, that is a logical filter for quality.

However, many great investment candidates can slip through the cracks with this approach. That would preclude dividend payers with recently announced dividends like Alphabet ( GOOGL ) and Meta Platforms ( META )....

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