HUM Value Scorecard - Humana

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

29/60

low-moderate value score

Earnings & returns

EPS Trend

1/5

Diluted EPS: $22.08 (2022), $20.00 (2023), $9.98 (2024), $9.84 (2025). The latest figure is half the 2022 figure or less; the framework scores that as 1.

ROE Trend

3/5

ROE (net income / common equity): 18.3% (2022), 15.3% (2023), 7.4% (2024), 6.7% (2025). Median 11.3%, lowest 6.7%; the framework scores a median 10-15% as 3.

ROIC

2/5

ROIC of 8.3%: operating income of $2.70B divided by $32.56B of capital (total assets $48.91B minus current liabilities $16.35B), fiscal year to Dec 31, 2025, as filed in the 10-K (SEC EDGAR). The framework scores 5-10% as 2.

Profit Margins

2/5

Net margin of 0.9%; the framework scores 0-5% as 2; gross margin 13.7%, operating margin 3.5%.

Balance sheet & cash

Debt-to-Equity

5/5

Net cash: total debt $14.74B, total cash $23.87B. The framework scores a net cash position as 5.

Free Cash Flow

1/5

Free cash flow (operating cash flow minus capital expenditure): $3.45B (2022), $2.98B (2023), $2.39B (2024), $375.00M (2025). The latest figure is half the 2022 figure or less; the framework scores that as 1.

Retained Earnings

5/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $25.49B (2022), $27.54B (2023), $28.32B (2024), $29.07B (2025). It rose every year; the framework scores that as 5.

Valuation models

Graham IV

1/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $10.58 x (8.5 + 2 x 0.0) x (4.4 / 4.5) = $87.93 (EPS CAGR -29.9% floored at 0%; the formula returns a negative value below -4.25% growth). Current price $413.16; price is 369.9% above the model value.

DCF Value

1/5

FCF/share = $16.164, stage 1 growth = 10.4% for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $81.71, PV of terminal value = $242.20, DCF value = $323.91. Current price $413.16; price is 27.6% above the model value.

Margin of Safety

1/5

Graham value $87.93 (price is 369.9% above the model value); DCF value $323.91 (price is 27.6% above the model value).

Price-to-Book

3/5

P/B of 2.58; the framework scores 1.5-3.0 as 3.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 4 of 10 years (2016-2025); lowest 8.3%, highest 24.0%.

Gross margin, each year

Not reported: the filings don’t state a gross profit or cost of revenue figure, as is common for oil and gas companies, banks and insurers.

Competition, in the company’s own words · 10-K filed Feb 19, 2026

The health benefits industry is highly competitive. Our competitors vary by local market and include other managed care companies, national insurance companies, and other HMOs and PPOs. Many of our competitors have a larger membership base and/or greater financial resources than our health plans in the markets in which we compete. Our ability to sell our products and to retain customers may be influenced by such factors as those described in Part I, Item 1A, "Risk Factors" of this Form 10-K.

The opening of the company’s “Competition” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

4/5

Capital allocation, 2022-2025: dividends or buybacks paid in every year (pass); $6.32B paid out against $9.19B of free cash flow (pass); total debt $11.13B to $12.37B, up 11.2% (fail: up more than 10%); shares outstanding 0.12B to 0.12B, down 3.5% (pass). 3 of 4 tests passed; the framework scores that as 4.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $10.58, g = 0.0%, Y = 4.5
    g floored at 0.0% (3-year EPS CAGR was -29.9%; below -4.25% the formula returns a negative value)
    IV = $87.93
    Current price $413.16 vs Graham value $87.93 — price is 369.9% above the model value.

  DCF:
    FCF/share = $16.164
    Stage 1 growth = 10.4% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
      Y1: $17.845 → PV $16.223
      Y2: $19.701 → PV $16.282
      Y3: $21.750 → PV $16.341
      Y4: $24.012 → PV $16.401
      Y5: $26.509 → PV $16.460
    Stage 1 PV sum = $81.71
    Terminal value at end of Y5 = $390.07
    PV of terminal value = $242.20
    DCF value = $323.91
    Current price $413.16 vs DCF value $323.91 — price is 27.6% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $413.16. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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