Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
MVA
Humana Inc., MVA calculation
US$ in millions
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
Between 2019 and 2023, the Market Value Added (MVA) exhibited a trajectory of gradual growth followed by a significant contraction. While the MVA reached a peak in 2022, a sharp decline occurred in 2023, resulting in the lowest value observed over the five-year period.
- Market Value Trends
- The market value showed a consistent upward trend from US$ 55,899 million in 2019 to a peak of US$ 74,659 million in 2022. This growth trend reversed sharply in 2023, with the market value falling to US$ 56,388 million, effectively returning to levels observed in 2019 and 2020.
- Invested Capital Growth
- Invested capital experienced steady expansion from US$ 18,877 million in 2019 to US$ 30,647 million in 2021. After 2021, the invested capital stabilized, fluctuating slightly to end at US$ 30,225 million in 2023.
- Market Value Added Analysis
- MVA increased from US$ 37,022 million in 2019 to a high of US$ 45,570 million in 2022, indicating that the market's valuation of the company grew faster than the capital invested during that timeframe. However, in 2023, MVA contracted to US$ 26,163 million. This substantial decrease is the result of a significant drop in market value coinciding with a period where invested capital remained at historically high levels.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
MVA Spread Ratio
Humana Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 26,163) | 45,570) | 37,671) | 35,658) | 37,022) | |
| Invested capital2 | 30,225) | 29,089) | 30,647) | 21,850) | 18,877) | |
| Performance Ratio | ||||||
| MVA spread ratio3 | 86.56% | 156.66% | 122.92% | 163.20% | 196.12% | |
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | 257.59% | 230.60% | 266.78% | — | — | |
| Elevance Health Inc. | 105.63% | 108.49% | 116.25% | — | — | |
| Intuitive Surgical Inc. | 1,699.53% | 1,400.02% | 2,002.36% | — | — | |
| Medtronic PLC | 88.43% | 93.80% | 163.10% | — | — | |
| UnitedHealth Group Inc. | 192.81% | 214.27% | 265.59% | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2023 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × 26,163 ÷ 30,225 = 86.56%
4 Click competitor name to see calculations.
The analysis of market value added and invested capital reveals a period of capital expansion followed by a significant contraction in market-perceived value between 2019 and 2023.
- Market Value Added (MVA)
- MVA exhibited moderate fluctuations between 2019 and 2021, remaining within the 35 to 38 billion range. A peak was reached in 2022 at 45,570 million, representing the highest point of value creation during the period. However, a sharp decline occurred in 2023, with MVA falling to 26,163 million, marking a substantial reduction in the market premium over the invested capital.
- Invested Capital
- Invested capital showed a consistent upward trend from 2019 to 2021, increasing from 18,877 million to 30,647 million. Following this growth phase, the capital base stabilized, remaining relatively flat between 29,089 million in 2022 and 30,225 million in 2023.
- MVA Spread Ratio
- The MVA spread ratio experienced a general downward trajectory, indicating a decrease in value creation efficiency relative to the capital employed. Starting at 196.12% in 2019, the ratio declined to 122.92% by 2021. Although a temporary recovery to 156.66% was observed in 2022, the ratio fell sharply to 86.56% in 2023, representing the lowest level in the analyzed timeframe.
The divergence between the stabilizing invested capital and the declining MVA in the final year suggests a significant contraction in the market's valuation of the company's future growth prospects and capital efficiency.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
MVA Margin
Humana Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Market value added (MVA)1 | 26,163) | 45,570) | 37,671) | 35,658) | 37,022) | |
| External revenues | 105,305) | 92,488) | 82,877) | 76,001) | 64,387) | |
| Add: Increase (decrease) in unearned revenues | (20) | 32) | (64) | 71) | (36) | |
| Adjusted external revenues | 105,285) | 92,520) | 82,813) | 76,072) | 64,351) | |
| Performance Ratio | ||||||
| MVA margin2 | 24.85% | 49.25% | 45.49% | 46.87% | 57.53% | |
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Abbott Laboratories | 383.09% | 323.76% | 384.46% | — | — | |
| Elevance Health Inc. | 43.23% | 46.56% | 54.23% | — | — | |
| Intuitive Surgical Inc. | 1,695.34% | 1,209.45% | 1,575.51% | — | — | |
| Medtronic PLC | 199.61% | 205.92% | 391.27% | — | — | |
| UnitedHealth Group Inc. | 95.85% | 109.81% | 130.39% | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 MVA. See details »
2 2023 Calculation
MVA margin = 100 × MVA ÷ Adjusted external revenues
= 100 × 26,163 ÷ 105,285 = 24.85%
3 Click competitor name to see calculations.
The financial trajectory between 2019 and 2023 reveals a significant divergence between operational growth and market value creation. While revenue increased consistently throughout the period, the market value added experienced volatility, culminating in a sharp contraction in the final year.
- Market Value Added (MVA)
- The MVA remained relatively stable between 2019 and 2021, fluctuating between 35.6 billion and 37.7 billion US dollars. A peak was reached in 2022 at 45.57 billion US dollars, representing the highest point of market value creation in the observed period. However, a substantial decline occurred by December 31, 2023, with the value falling to 26.16 billion US dollars, the lowest level recorded in five years.
- Adjusted External Revenues
- Revenue demonstrated a strong and uninterrupted upward trend. From 64.35 billion US dollars in 2019, revenues grew annually to reach 105.29 billion US dollars by 2023. This represents a consistent expansion of the company's operational scale and market reach over the five-year window.
- MVA Margin
- The MVA margin, which measures the relationship between market value added and revenue, showed a general downward trend. The margin started at 57.53% in 2019 and experienced a notable decline to 46.87% in 2020. Despite a slight recovery to 49.25% in 2022, the margin collapsed to 24.85% in 2023. This indicates that the growth in external revenues was not matched by a corresponding increase in market valuation, suggesting a diminishing capacity to convert revenue growth into additional market value.
The overall analysis suggests that while the company successfully scaled its top-line revenue, market sentiment or valuation metrics shifted negatively by 2023. The inverse relationship observed in the final year—where revenues reached a peak while MVA and MVA margin reached their troughs—highlights a period of significant value erosion despite operational expansion.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?