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Here's What Makes UnitedHealth Group (UNH) a Lucrative Bet Now
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UnitedHealth Group Incorporated (UNH - Free Report) is aided by a well-performing government business, owing to increasing premiums and numerous contract wins. The pursuit of buyouts and a solid financial position are other tailwinds.
Zacks Rank & Price Rally
UnitedHealth Group currently carries a Zacks Rank #2 (Buy).
The stock has lost 9.6% in the past six months compared with the industry’s 9.8% decline.
Image Source: Zacks Investment Research
Favorable Style Score
UNH carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. The back-tested results show that stocks with a Value Score of A or B in combination with a Zacks Rank #1 (Strong Buy) or 2 are the best investment bets.
Robust Growth Prospects
The Zacks Consensus Estimate for UnitedHealth Group’s 2023 earnings is pegged at $24.91 per share, which indicates an improvement of 12.3% from the year-ago reported figure. The same for revenues stands at $359 billion, implying 10.7% growth from the prior-year reported number.
The Zacks Consensus Estimate for 2024 earnings is pegged at $28.22 per share, marking 13.3% growth from the 2023 estimate. The same for revenues stands at $383.8 billion, marking a rise of 6.9% from the 2023 estimate.
Impressive Earnings Surprise History
UNH boasts an impressive surprise record. Its earnings outpaced estimates in each of the trailing four quarters, the average being 4.38%.
Solid Return on Equity
UnitedHealth Group’s efficiency in utilizing shareholders’ funds can be substantiated by its trailing 12-month return on equity of 27%, which remains higher than the industry’s average of 24.6%.
Robust 2023 Outlook
UnitedHealth Group anticipates revenues between $357 billion and $360 billion, the mid-point of which indicates an improvement of 10.6% from the 2022 reported figure.
Adjusted net earnings per share are estimated between $24.40 and $24.90 for the year. The mid-point of the updated guidance suggests 11.1% growth from the 2022 figure.
Business Tailwinds
Revenues of UnitedHealth Group continue to gain on the back of solid contributions from its UnitedHealthcare and Optum businesses. Through the UnitedHealthcare unit, UNH devises effective Medicare and Medicaid businesses, as well as integrates lucrative features within them from time to time. These affordable plans expand the membership base of the health insurer and fetch them growing premiums.
The beneficial features of the plans have also given several contract wins or renewed agreements to UnitedHealth Group from the federal or state authorities. One of the most recent contract wins was in March 2023, wherein its Indiana unit won a contract from the Family and Social Services Administration ("FSSA") of Indiana to serve the Medicaid beneficiaries of the state.
Further, an aging U.S. population is likely to sustain a solid demand for UNH’s Medicare plans in the days ahead. Notably, the Commercial business falling under the UnitedHealthcare unit is witnessing a turnaround after facing a dismal period of membership decline following the COVID-19 pandemic.
The Optum unit continues to benefit from numerous buyouts and the utilization of advanced technology, market-leading health analytics, modern care delivery and data-driven population health approaches.
UnitedHealth Group has been pursuing collaborations with renowned healthcare providers to bolster its capabilities and solidify its nationwide presence. The health insurer has resorted to significant investments in developing efficient telehealth services, following the pandemic-induced inclination of patients to avail healthcare services virtually.
A solid financial position is a dire need for companies that keep an eye on continued business investments. The same is the case with UnitedHealth Group, which boasts a growing cash balance and solid cash-generating abilities. Apart from growth-related initiatives, a sound financial stand instills confidence in UNH in the tactical deployment of capital through share buybacks and dividend payments. Its dividend yield of 1.4% remains higher than the industry’s figure of 1.2%.
Amphastar’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and matched the mark once, the average beat being 34.99%. The Zacks Consensus Estimate for AMPH’s 2023 earnings suggests an improvement of 3.1% from the year-ago reported figure, while the same for revenues indicates growth of 9.4%.
The Zacks Consensus Estimate for AMPH’s 2023 earnings has moved 4.6% north in the past 30 days. Shares of Amphastar Pharmaceuticals have gained 31.4% in the past six months.
Lantheus’ earnings surpassed estimates in each of the last four quarters, the average being 50.00%. The Zacks Consensus Estimate for LNTH’s 2023 earnings indicates a 13.5% rise from the prior-year reported figure, while the same for revenues suggests an improvement of 24.3%.
The consensus mark for LNTH’s 2023 earnings has moved 12.7% north in the past 60 days. Shares of Lantheus have gained 7.5% in the past six months.
Henry Schein’s earnings outpaced estimates in three of the trailing four quarters and matched the mark once, the average being 2.97%. The Zacks Consensus Estimate for HSIC’s 2023 earnings indicates a 10.6% rise from the prior-year reported figure, while the same for revenues suggests an improvement of 1.6%.
The consensus mark for HSIC’s 2023 earnings has moved up 0.9% in the past 30 days. Shares of Henry Schein have gained 16.2% in the past six months.
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Here's What Makes UnitedHealth Group (UNH) a Lucrative Bet Now
UnitedHealth Group Incorporated (UNH - Free Report) is aided by a well-performing government business, owing to increasing premiums and numerous contract wins. The pursuit of buyouts and a solid financial position are other tailwinds.
Zacks Rank & Price Rally
UnitedHealth Group currently carries a Zacks Rank #2 (Buy).
The stock has lost 9.6% in the past six months compared with the industry’s 9.8% decline.
Image Source: Zacks Investment Research
Favorable Style Score
UNH carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. The back-tested results show that stocks with a Value Score of A or B in combination with a Zacks Rank #1 (Strong Buy) or 2 are the best investment bets.
Robust Growth Prospects
The Zacks Consensus Estimate for UnitedHealth Group’s 2023 earnings is pegged at $24.91 per share, which indicates an improvement of 12.3% from the year-ago reported figure. The same for revenues stands at $359 billion, implying 10.7% growth from the prior-year reported number.
The Zacks Consensus Estimate for 2024 earnings is pegged at $28.22 per share, marking 13.3% growth from the 2023 estimate. The same for revenues stands at $383.8 billion, marking a rise of 6.9% from the 2023 estimate.
Impressive Earnings Surprise History
UNH boasts an impressive surprise record. Its earnings outpaced estimates in each of the trailing four quarters, the average being 4.38%.
Solid Return on Equity
UnitedHealth Group’s efficiency in utilizing shareholders’ funds can be substantiated by its trailing 12-month return on equity of 27%, which remains higher than the industry’s average of 24.6%.
Robust 2023 Outlook
UnitedHealth Group anticipates revenues between $357 billion and $360 billion, the mid-point of which indicates an improvement of 10.6% from the 2022 reported figure.
Adjusted net earnings per share are estimated between $24.40 and $24.90 for the year. The mid-point of the updated guidance suggests 11.1% growth from the 2022 figure.
Business Tailwinds
Revenues of UnitedHealth Group continue to gain on the back of solid contributions from its UnitedHealthcare and Optum businesses. Through the UnitedHealthcare unit, UNH devises effective Medicare and Medicaid businesses, as well as integrates lucrative features within them from time to time. These affordable plans expand the membership base of the health insurer and fetch them growing premiums.
The beneficial features of the plans have also given several contract wins or renewed agreements to UnitedHealth Group from the federal or state authorities. One of the most recent contract wins was in March 2023, wherein its Indiana unit won a contract from the Family and Social Services Administration ("FSSA") of Indiana to serve the Medicaid beneficiaries of the state.
Further, an aging U.S. population is likely to sustain a solid demand for UNH’s Medicare plans in the days ahead. Notably, the Commercial business falling under the UnitedHealthcare unit is witnessing a turnaround after facing a dismal period of membership decline following the COVID-19 pandemic.
The Optum unit continues to benefit from numerous buyouts and the utilization of advanced technology, market-leading health analytics, modern care delivery and data-driven population health approaches.
UnitedHealth Group has been pursuing collaborations with renowned healthcare providers to bolster its capabilities and solidify its nationwide presence. The health insurer has resorted to significant investments in developing efficient telehealth services, following the pandemic-induced inclination of patients to avail healthcare services virtually.
A solid financial position is a dire need for companies that keep an eye on continued business investments. The same is the case with UnitedHealth Group, which boasts a growing cash balance and solid cash-generating abilities. Apart from growth-related initiatives, a sound financial stand instills confidence in UNH in the tactical deployment of capital through share buybacks and dividend payments. Its dividend yield of 1.4% remains higher than the industry’s figure of 1.2%.
Other Stocks to Consider
Some other top-ranked stocks in the Medical space are Amphastar Pharmaceuticals, Inc. (AMPH - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Henry Schein, Inc. (HSIC - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Amphastar’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and matched the mark once, the average beat being 34.99%. The Zacks Consensus Estimate for AMPH’s 2023 earnings suggests an improvement of 3.1% from the year-ago reported figure, while the same for revenues indicates growth of 9.4%.
The Zacks Consensus Estimate for AMPH’s 2023 earnings has moved 4.6% north in the past 30 days. Shares of Amphastar Pharmaceuticals have gained 31.4% in the past six months.
Lantheus’ earnings surpassed estimates in each of the last four quarters, the average being 50.00%. The Zacks Consensus Estimate for LNTH’s 2023 earnings indicates a 13.5% rise from the prior-year reported figure, while the same for revenues suggests an improvement of 24.3%.
The consensus mark for LNTH’s 2023 earnings has moved 12.7% north in the past 60 days. Shares of Lantheus have gained 7.5% in the past six months.
Henry Schein’s earnings outpaced estimates in three of the trailing four quarters and matched the mark once, the average being 2.97%. The Zacks Consensus Estimate for HSIC’s 2023 earnings indicates a 10.6% rise from the prior-year reported figure, while the same for revenues suggests an improvement of 1.6%.
The consensus mark for HSIC’s 2023 earnings has moved up 0.9% in the past 30 days. Shares of Henry Schein have gained 16.2% in the past six months.