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UNH

UnitedHealth Group NYSE:UNH Stock Report

Last Price

US$535.06

Market Cap

US$500.5b

7D

-1.3%

1Y

28.9%

Updated

06 Aug, 2022

Data

Company Financials +
UNH fundamental analysis
Snowflake Score
Valuation3/6
Future Growth3/6
Past Performance6/6
Financial Health5/6
Dividends4/6

UNH Stock Overview

UnitedHealth Group Incorporated operates as a diversified health care company in the United States.

UnitedHealth Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for UnitedHealth Group
Historical stock prices
Current Share PriceUS$535.06
52 Week HighUS$553.29
52 Week LowUS$383.12
Beta0.76
1 Month Change4.02%
3 Month Change7.09%
1 Year Change28.89%
3 Year Change115.20%
5 Year Change177.20%
Change since IPO139,670.59%

Recent News & Updates

Aug 02
Slowing Rates Of Return At UnitedHealth Group (NYSE:UNH) Leave Little Room For Excitement

Slowing Rates Of Return At UnitedHealth Group (NYSE:UNH) Leave Little Room For Excitement

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Typically, we'll...

Jul 21

UnitedHealth: Is A Stock Split Likely?

UnitedHealth has delivered 10x returns over the past decade. With the stock trading above $500 per share, a stock split appears likely. The stock trades at a huge premium relative to peers. I discuss whether the stock is a buy at current prices. UnitedHealth (UNH) is widely regarded as one of the best-run managed healthcare and insurance companies in the country. That distinction has earned the stock a notable premium relative to peers, which may be supported by consistent growth and a strong balance sheet. With the stock trading above $500 per share, investors may be wondering if a stock split is likely. I am of the opinion that the answer is yes for the reasons discussed below. UNH Stock Price Over the past decade, UNH has delivered 10x returns (including dividends). Data by YCharts Now trading around $520 per share, UNH is already up 90% from the beginning of 2020 alone. We can see that the outperformance of the past decade was driven, in part, by substantial multiple expansion from the low teens to near 30x as of the present day. Data by YCharts I have a hunch that multiple expansion is not in the cards moving forward - investors should anticipate more modest forward returns. UNH Stock Key Metrics The latest quarter saw much of what investors have come to expect from the company: consistency. Revenues grew 13% to $80.3 billion, but earnings grew faster at 19% due to operating leverage. The operating leverage was driven in part by an improvement in the medical care ratio from 82.8% to 81.5%. Earnings per share came in at $5.34 and adjusted earnings per share was $5.57. Investors should use adjusted earnings because the main adjustment is backing out non-cash intangible amortization. 2022 Q2 Press Release The company returned $4 billion to shareholders through dividends and share repurchases and increased the dividend by 14% to $1.65 per share. As typical for the company, it increased earnings outlook to $21.90 in adjusted earnings per share. The company had previously increased that outlook to $21.70 in adjusted earnings per share in the previous quarter, which itself was already an increase from the initial $21.60 per share outlook given in the fourth quarter. UNH had $70.8 billion between cash and long-term investments versus $76.2 billion split between medical costs payable and long-term debt. When Was The Last Time UNH Stock Split? UNH last split in 2005 when it did a 2-for-1 stock split. The company has done 5 splits in total. UnitedHealth Investor Relations Is UnitedHealth Stock Likely To Split Again? In the days prior to the most recent stock splits, the stock traded around $100 per share - far lower than current prices. What's more, with the stock trading near 30x earnings, I would not be surprised if the company utilized the stock split as a catalyst for future upside, as valuations are arguably quite full. For reference, Cigna (CI) is trading at only 12x forward earnings. While stock splits do not create any fundamental value, there is the perception that it can lead to outperformance due to the increased liquidity. What Is UNH Stock's Long-Term Outlook? UNH is expected to sustain high single-digit revenue growth over the next decade. That outlook makes sense considering that UNH should grow in line with a growing workforce.

Shareholder Returns

UNHUS HealthcareUS Market
7D-1.3%0.6%1.0%
1Y28.9%12.6%-12.9%

Return vs Industry: UNH exceeded the US Healthcare industry which returned 12.6% over the past year.

Return vs Market: UNH exceeded the US Market which returned -12.8% over the past year.

Price Volatility

Is UNH's price volatile compared to industry and market?
UNH volatility
UNH Average Weekly Movement4.0%
Healthcare Industry Average Movement9.6%
Market Average Movement7.9%
10% most volatile stocks in US Market17.1%
10% least volatile stocks in US Market3.2%

Stable Share Price: UNH is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: UNH's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1977350,000Andrew Wittyhttps://www.unitedhealthgroup.com

UnitedHealth Group Incorporated operates as a diversified health care company in the United States. It operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage and well-being services to individuals age 50 and older addressing their needs for preventive and acute health care services, as well as services dealing with chronic disease and other specialized issues for older individuals; Medicaid plans, children’s health insurance and health care programs; health and dental benefits; and hospital and clinical services.

UnitedHealth Group Fundamentals Summary

How do UnitedHealth Group's earnings and revenue compare to its market cap?
UNH fundamental statistics
Market CapUS$500.49b
Earnings (TTM)US$18.25b
Revenue (TTM)US$306.56b

27.4x

P/E Ratio

1.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
UNH income statement (TTM)
RevenueUS$306.56b
Cost of RevenueUS$232.96b
Gross ProfitUS$73.60b
Other ExpensesUS$55.35b
EarningsUS$18.25b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)19.52
Gross Margin24.01%
Net Profit Margin5.95%
Debt/Equity Ratio63.3%

How did UNH perform over the long term?

See historical performance and comparison

Dividends

1.2%

Current Dividend Yield

31%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is UNH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for UNH?

Other financial metrics that can be useful for relative valuation.

UNH key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.7x
Enterprise Value/EBITDA19.4x
PEG Ratio2.4x

Price to Earnings Ratio vs Peers

How does UNH's PE Ratio compare to its peers?

UNH PE Ratio vs Peers
The above table shows the PE ratio for UNH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average23x
ELV Elevance Health
18.7x10.7%US$114.0b
HUM Humana
19.5x13.3%US$61.3b
CNC Centene
28.6x21.9%US$53.2b
MOH Molina Healthcare
25.1x15.3%US$18.9b
UNH UnitedHealth Group
27.4x11.3%US$500.5b

Price-To-Earnings vs Peers: UNH is expensive based on its Price-To-Earnings Ratio (27.4x) compared to the peer average (23x).


Price to Earnings Ratio vs Industry

How does UNH's PE Ratio compare vs other companies in the US Healthcare Industry?

Price-To-Earnings vs Industry: UNH is expensive based on its Price-To-Earnings Ratio (27.4x) compared to the US Healthcare industry average (19.8x)


Price to Earnings Ratio vs Fair Ratio

What is UNH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

UNH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio27.4x
Fair PE Ratio45.6x

Price-To-Earnings vs Fair Ratio: UNH is good value based on its Price-To-Earnings Ratio (27.4x) compared to the estimated Fair Price-To-Earnings Ratio (45.6x).


Share Price vs Fair Value

What is the Fair Price of UNH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: UNH ($535.06) is trading below our estimate of fair value ($800.28)

Significantly Below Fair Value: UNH is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is UnitedHealth Group forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


11.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UNH's forecast earnings growth (11.3% per year) is above the savings rate (1.9%).

Earnings vs Market: UNH's earnings (11.3% per year) are forecast to grow slower than the US market (12.8% per year).

High Growth Earnings: UNH's earnings are forecast to grow, but not significantly.

Revenue vs Market: UNH's revenue (8.1% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: UNH's revenue (8.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: UNH's Return on Equity is forecast to be high in 3 years time (28.4%)


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Past Performance

How has UnitedHealth Group performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


12.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: UNH has high quality earnings.

Growing Profit Margin: UNH's current net profit margins (6%) are higher than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: UNH's earnings have grown by 12.6% per year over the past 5 years.

Accelerating Growth: UNH's earnings growth over the past year (25.8%) exceeds its 5-year average (12.6% per year).

Earnings vs Industry: UNH earnings growth over the past year (25.8%) exceeded the Healthcare industry 7.7%.


Return on Equity

High ROE: UNH's Return on Equity (23.1%) is considered high.


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Financial Health

How is UnitedHealth Group's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: UNH's short term assets ($64.3B) do not cover its short term liabilities ($88.7B).

Long Term Liabilities: UNH's short term assets ($64.3B) exceed its long term liabilities ($60.3B).


Debt to Equity History and Analysis

Debt Level: UNH's net debt to equity ratio (28.9%) is considered satisfactory.

Reducing Debt: UNH's debt to equity ratio has reduced from 67.9% to 63.3% over the past 5 years.

Debt Coverage: UNH's debt is well covered by operating cash flow (44.7%).

Interest Coverage: UNH's interest payments on its debt are well covered by EBIT (14.5x coverage).


Balance Sheet


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Dividend

What is UnitedHealth Group current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.23%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: UNH's dividend (1.23%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: UNH's dividend (1.23%) is low compared to the top 25% of dividend payers in the US market (4.09%).


Stability and Growth of Payments

Stable Dividend: UNH's dividends per share have been stable in the past 10 years.

Growing Dividend: UNH's dividend payments have increased over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (30.9%), UNH's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (30.2%), UNH's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

1.5yrs

Average management tenure


CEO

Andrew Witty (57 yo)

1.5yrs

Tenure

US$18,433,143

Compensation

Sir Andrew Philip Witty has been the Chief Executive Officer and Director of UnitedHealth Group Incorporated since February 3, 2021 and served as its Group President since November 2019 until February 3, 2...


CEO Compensation Analysis

Compensation vs Market: Andrew's total compensation ($USD18.43M) is above average for companies of similar size in the US market ($USD13.00M).

Compensation vs Earnings: Andrew's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: UNH's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

Experienced Board: UNH's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: UNH insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

UnitedHealth Group Incorporated's employee growth, exchange listings and data sources


Key Information

  • Name: UnitedHealth Group Incorporated
  • Ticker: UNH
  • Exchange: NYSE
  • Founded: 1977
  • Industry: Managed Health Care
  • Sector: Healthcare
  • Implied Market Cap: US$500.486b
  • Shares outstanding: 935.38m
  • Website: https://www.unitedhealthgroup.com

Number of Employees


Location

  • UnitedHealth Group Incorporated
  • UnitedHealth Group Center
  • 9900 Bren Road East
  • Minnetonka
  • Minnesota
  • 55343
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/06 00:00
End of Day Share Price2022/08/05 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.