Cigna (CI) has emerged as a stable investment choice in a turbulent market characterized by volatility in semiconductor stocks and AI headlines. The company reported an adjusted EPS of $7.79 for the first quarter and raised its full-year guidance to at least $30.35 per share, marking its fifth consecutive quarterly EPS beat.
Cigna's stock, priced just over $290, trades at approximately 9.5 times forward earnings, significantly lower than the S&P 500 average, while offering a dividend yield of 2.2%. With a remaining $2.5 billion on its $6 billion buyback program, the company is committed to returning value to shareholders.
To generate income, an investor could sell a cash-secured put option at the July $280 strike price, which recently traded around $6. This strategy allows for potential gains if the stock remains above $280, or an effective purchase price of $274 if assigned.
While there are risks associated with managed care, such as medical cost trends and market volatility, the approach offers a way to manage entry points and generate income through dividends and covered calls, providing a counterbalance to the current market fluctuations