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Anthem, Inc. (ANTM - Free Report) recently announced that it has the intentions to change its name to Elevance Health, Inc. However, this alteration is subject to its shareholder approvals.

This name change is expected to reflect the leading health insurer’s expanding business. Management thinks that the rebranding step is essential for its future. Management expects ANTM to serve communities through a holistic approach after this fresh alteration. Anthem owns Blue Cross Blue Shield plans in 14 states, the names of which will not change.

This move will eventually optimize ANTM’s portfolio, which currently serves more than 118 million customers. The approach of changing names and rebranding is nothing new in this space. Earlier, Anthem adopted the name WellPoint Inc. following its merger in 2004 until it switched back to its original name in 2014.

One of the company's peers, UnitedHealth Group, Inc. (UNH - Free Report), separated its UnitedHealthcare unit from Optum to streamline its operations. Optum gradually became a brand known for pharmacy care services, care delivery, technology, government services, etc. In 2018, CVS Health Corporation (CVS - Free Report) purchased Aetna and uses the name Aetna for business.

Returning to Anthem, this name change is necessary because ANTM has outpaced traditional health insurance services and has penetrated pharmacy, behavioral, clinical, and various other areas of healthcare. Its digital capabilities helped provide value-based care to its customers. ANTM continues to witness a rise in the usage of its virtual care services, which is a vital driver.

Diversification helps health insurance players add businesses with high margins and a rapid growth potential. Shares of this currently ranked Zacks Rank #3 (Hold) player have gained 38.5% in a year's time, outperforming its industry's growth of 33.2%.

Strategic buyouts and collaborations, an improving top line, and ANTM’s expanded product portfolio should all drive long-term growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This Indianapolis-based player has been gaining from inorganic growth for many years now. The acquisitions of Missouri and Nebraska Medicaid plans of WellCare Health in January 2020 also added around 300,000 Medicaid members under its coverage.

Anthem’s buyout of Beacon Health, the country’s largest independently held behavioral health organization, should strengthen its position in the space. Last June, ANTM completed the purchase of Puerto Rico-based subsidiaries, including MMM Holdings from InnovaCare Health. Also, in November, ANTM agreed to acquire Integra Managed Care to expand its Medicaid business.

Anthem’s strong cash position drove consistent dividend payouts and stock repurchases.

Stock to Consider

A better-ranked stock in the medical space is Mednax, Inc. (MD - Free Report). Mednax provides newborn, maternal-fetal, radiology, pediatric cardiology, and other pediatric sub-specialties physician services in the United States and Puerto Rico. MD has a Zacks Rank #1 (Strong Buy) and a trailing four-quarter earnings surprise of 27.99%, on average.