NYSE:UNH

Stock Analysis Report

Executive Summary

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

Rewards

Trading at 53.9% below its fair value

Earnings are forecast to grow 11.12% per year

Earnings grew by 15.5% over the past year

Pays a high and reliable dividend of 1.5%

Risk Analysis

Has a high level of debt

Highly volatile share price over past 3 months



Snowflake Analysis

Solid track record established dividend payer.


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Share Price & News

How has UnitedHealth Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UNH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.1%

UNH

2.0%

US Healthcare

2.0%

US Market


1 Year Return

12.4%

UNH

14.8%

US Healthcare

23.5%

US Market

Return vs Industry: UNH underperformed the US Healthcare industry which returned 15.3% over the past year.

Return vs Market: UNH underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

UNHIndustryMarket
7 Day1.1%2.0%2.0%
30 Day1.9%4.1%4.3%
90 Day21.7%19.3%12.2%
1 Year14.3%12.4%16.8%14.8%26.1%23.5%
3 Year96.8%88.1%53.1%46.4%53.1%43.2%
5 Year188.3%166.5%65.9%54.5%75.5%56.1%

Price Volatility Vs. Market

How volatile is UnitedHealth Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is UnitedHealth Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UNH ($288.24) is trading below our estimate of fair value ($624.95)

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


Price To Earnings Ratio

PE vs Industry: UNH is good value based on its PE Ratio (20.6x) compared to the Healthcare industry average (23.1x).

PE vs Market: UNH is poor value based on its PE Ratio (20.6x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: UNH is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: UNH is overvalued based on its PB Ratio (5x) compared to the US Healthcare industry average (3.1x).


Next Steps

Future Growth

How is UnitedHealth Group forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

10.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: UNH's forecast earnings growth (11.1% per year) is above the savings rate (1.7%).

Earnings vs Market: UNH's earnings (11.1% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: UNH's revenue (6.7% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: UNH's revenue (6.7% 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 (26.3%)


Next Steps

Past Performance

How has UnitedHealth Group performed over the past 5 years?

20.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UNH has high quality earnings.

Growing Profit Margin: UNH's current net profit margins (5.7%) are higher than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: UNH's earnings have grown significantly by 20.8% per year over the past 5 years.

Accelerating Growth: UNH's earnings growth over the past year (6.2%) is below its 5-year average (20.8% per year).

Earnings vs Industry: UNH earnings growth over the past year (15.5%) exceeded the Healthcare industry 6.2%.


Return on Equity

High ROE: UNH's Return on Equity (23%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is UnitedHealth Group's financial position?


Financial Position Analysis

Short Term Liabilities: UNH's short term assets ($40.5B) do not cover its short term liabilities ($62.6B).

Long Term Liabilities: UNH's short term assets ($40.5B) do not cover its long term liabilities ($51.3B).


Debt to Equity History and Analysis

Debt Level: UNH's debt to equity ratio (75.1%) is considered high.

Reducing Debt: UNH's debt to equity ratio has increased from 51.7% to 75.1% over the past 5 years.

Debt Coverage: UNH's debt is well covered by operating cash flow (32.6%).

Interest Coverage: UNH's interest payments on its debt are well covered by EBIT (11.6x coverage).


Balance Sheet

Inventory Level: UNH has a low level of unsold assets or inventory.

Debt Coverage by Assets: UNH's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

1.45%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: UNH's dividend (1.5%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: UNH's dividend (1.5%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.3%), UNH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UNH's dividends in 3 years are forecast to be well covered by earnings (20.3% payout ratio).


Next Steps

Management

What is the CEO of UnitedHealth Group's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Dave Wichmann (56yo)

2.3yrs

Tenure

US$18,107,356

Compensation

Mr. David Scott Wichmann, also known as Dave, serves as a Director of Surgical Care Affiliates, Inc. Mr. Wichmann has been the Chief Executive Officer and Director of UnitedHealth Group Incorporated since  ...


CEO Compensation Analysis

Compensation vs Market: Dave's total compensation ($USD18.11M) is above average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Dave's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.3yrs

Average Tenure

56yo

Average Age

Experienced Management: UNH's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

65yo

Average Age

Experienced Board: UNH's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: UNH insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$2,026,54919 Nov 19
D. Wilson
EntityIndividual
Shares7,400
Max PriceUS$273.86
SellUS$300,17708 Nov 19
Thomas Roos
EntityIndividual
Role
Chief Accounting Officer
Senior VP & Chief Accounting Officer
Shares1,177
Max PriceUS$255.04
SellUS$5,914,01518 Oct 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares25,000
Max PriceUS$236.56
SellUS$1,169,00023 Sep 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares5,000
Max PriceUS$234.20
SellUS$1,163,39719 Sep 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares5,000
Max PriceUS$232.76
BuyUS$455,09429 Aug 19
Timothy Flynn
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$227.55
SellUS$463,00026 Aug 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares2,000
Max PriceUS$231.50
SellUS$1,232,00012 Aug 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares5,000
Max PriceUS$246.40
SellUS$3,063,66024 Jul 19
William Ballard
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares12,000
Max PriceUS$255.31
SellUS$2,480,00012 Jun 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares10,000
Max PriceUS$248.00
SellUS$2,419,88330 May 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares10,000
Max PriceUS$241.99
BuyUS$4,635,73006 May 19
David Wichmann
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares20,000
Max PriceUS$231.79
BuyUS$1,499,53403 May 19
Frederick McNabb
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,430
Max PriceUS$233.21
SellUS$2,297,50126 Apr 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares10,000
Max PriceUS$229.75
SellUS$1,286,58421 Mar 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares5,000
Max PriceUS$257.32
SellUS$1,225,05514 Mar 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares5,000
Max PriceUS$245.01
SellUS$3,082,00024 Jan 19
Richard Burke
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares11,500
Max PriceUS$268.00

Ownership Breakdown

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


Management Team

  • Andrew Witty (54yo)

    Group President

    • Tenure: 0.2yrs
    • Compensation: US$22.00m
  • Steve Nelson (60yo)

    Executive VP & Office of the Chief Executive

    • Tenure: 2.3yrs
    • Compensation: US$9.76m
  • Dave Wichmann (56yo)

    CEO & Director

    • Tenure: 2.3yrs
    • Compensation: US$18.11m
  • Marianne Short (67yo)

    Office of the Chief Executive

    • Tenure: 7yrs
    • Compensation: US$6.49m
  • John Rex (57yo)

    CFO, Executive VP & Member of the Office of the Chief Executive

    • Tenure: 3.6yrs
    • Compensation: US$8.59m
  • James Barry (73yo)

    Director of Sales for Western Pennsylvania

    • Jennifer Whitlow (46yo)

      Senior VP & Chief Communications Officer

      • Tenure: 1yrs
    • Phil McKoy (46yo)

      Chief Information Officer

      • Tom Roos (46yo)

        Senior VP & Chief Accounting Officer

        • Tenure: 4.4yrs
      • Ken Ehlert

        Chief Scientific Officer & Member of Office of the Chief Executive

        • Tenure: 1yrs

      Board Members

      • Glenn Renwick (64yo)

        Independent Director

        • Tenure: 19yrs
        • Compensation: US$352.72k
      • Steve Hemsley (66yo)

        Non-Executive Chairman

        • Tenure: 2.3yrs
        • Compensation: US$11.35m
      • Michele Hooper (67yo)

        Independent Director

        • Tenure: 12.3yrs
        • Compensation: US$338.71k
      • Bill Ballard (78yo)

        Independent Director

        • Tenure: 27yrs
        • Compensation: US$325.31k
      • Richard Burke (76yo)

        Lead Independent Director

        • Tenure: 2.3yrs
        • Compensation: US$405.99k
      • Gail Wilensky (76yo)

        Independent Director

        • Tenure: 27yrs
        • Compensation: US$338.60k
      • Tim Flynn (62yo)

        Independent Director

        • Tenure: 3yrs
        • Compensation: US$325.55k
      • Dave Wichmann (56yo)

        CEO & Director

        • Tenure: 2.3yrs
        • Compensation: US$18.11m
      • Bill McNabb (62yo)

        Independent Director

        • Tenure: 1.9yrs
        • Compensation: US$189.63k
      • Valerie C. Rice (57yo)

        Independent Director

        • Tenure: 2.4yrs
        • Compensation: US$318.33k

      Company Information

      UnitedHealth Group Incorporated's company bio, 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
      • Market Cap: US$284.926b
      • Shares outstanding: 947.41m
      • 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

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      UNHNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1984
      UNHDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1984
      UNHXTRA (XETRA Trading Platform)YesCommon StockDEEUROct 1984
      UNH *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1984
      UNHSNSE (Santiago Stock Exchange)YesCommon StockCLUSDOct 1984
      UNHSWX (SIX Swiss Exchange)YesCommon StockCHCHFOct 1984
      0R0OLSE (London Stock Exchange)YesCommon StockGBUSDOct 1984
      UNHWBAG (Wiener Boerse AG)YesCommon StockATEUROct 1984
      UNHETLX (Eurotlx)YesCommon StockITEUROct 1984
      UNHH34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REP 0.2 COM USD0.01BRBRLMay 2019

      Biography

      UnitedHealth Group Incorporated operates as a diversified health care company in the United States. It operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight, and OptumRx. 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 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; and Medicaid plans, Children’s Health Insurance Program, and health care programs; and health and dental benefits. The OptumHealth segment provides access to networks of care provider specialists, health management services, care delivery, consumer engagement, and financial services. This segment serves individuals through programs offered by employers, payers, government entities, and directly with the care delivery systems. The OptumInsight segment offers software and information products, advisory consulting arrangements, and services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations. The OptumRx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and compounding pharmacy, and purchasing and clinical, as well as develops programs in areas, such as step therapy, formulary management, drug adherence, and disease/drug therapy management. UnitedHealth Group Incorporated was incorporated in 1977 and is based in Minnetonka, Minnesota. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/17 23:47
      End of Day Share Price2020/01/17 00:00
      Earnings2019/12/31
      Annual Earnings2019/12/31


      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.