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Before the opening bell yesterday, the largest U.S. health insurer UnitedHealth Group (UNH - Free Report) came up with robust fourth-quarter 2016 results and reaffirmed its outlook for the full year.
Q4 Earnings in Focus
UnitedHealth Group continued its long streak of positive surprise with earnings per share of $2.11 beating the Zacks Consensus Estimate of $2.07. Earnings also came in 50.7%% higher than the year-ago quarter. Revenues rose 9% year over year to $47.5 billion, edging past the Zacks Consensus Estimate of $46.8 billion.
In particular, strong growth across its health insurance lines and Optum health services as well as reduced cost pressure from its ObamaCare exchange business were credited to the strong performance (read: Trump Healthcare Reforms: Will ETFs Gain Health or Suffer?).
UnitedHealth reaffirmed its 2017 outlook with revenues of $197–$199 billion and earnings per share of $9.30–$9.60. The Zacks Consensus Estimate is pegged at $198.63 billion for revenues and $9.50 for earnings per share.
Despite the upbeat results, the stock declined 0.7% at the close on the day. Investors might tap the beaten down prices in the basket form. This is because UnitedHealth has a Zacks Rank #2 (Buy) and boasts a solid Industry rank in the top 27%, underscoring its potential to outperform in the weeks ahead. Additionally, it is a triple play stock with a Value, Growth and Momentum Style Score of A each.
As a result, many investors may want to buy ETFs having the largest allocation to this giant health insurer. For them, iShares U.S. Healthcare Providers ETF (IHF - Free Report) could especially be on radar as UNH takes the top spot in the fund’s portfolio with 13.3% share (see: all the Healthcare ETFs here).
IHF in Focus
This ETF provides exposure to 47 companies that provide health insurance, diagnostics and specialized treatment by tracking the Dow Jones U.S. Select Healthcare Providers Index. About 46.8% of the portfolio is dominated by managed healthcare firms while healthcare services and healthcare facilities round off the top three spots. The fund has amassed $506.9 million in its asset base while volume is moderate at about 89,000 shares per day on average. It charges 44 bps in annual fees and expenses and added 0.1% following the UNH earnings release. The product has a Zacks ETF Rank of 2 or ‘Buy’ rating with a Medium risk outlook.
Other ETFs
Other healthcare ETFs like Health Care Select Sector SPDR Fund (XLV - Free Report) ,Vanguard Health Care ETF (VHT - Free Report) ,iShares U.S. Healthcare ETF (IYH - Free Report) ,John Hancock Multifactor Healthcare ETF and Fidelity MSCI Health Care Index ETF (FHLC - Free Report) also have a decent exposure to UnitedHealth in the range of 4–5%.
Apart from the healthcare space, UNH is among the top 10 holdings in some large cap ETFs such as SPDR Dow Jones Industrial Average ETF (DIA - Free Report) ,WisdomTree LargeCap Value Fund , PowerShares Dynamic Large Cap Growth Portfolio (PWB - Free Report) andFirst Trust Mega Cap AlphaDEX Fund with 5.6%, 3.4%, 3.4% and 3.3% share, respectively (read: What's In Store for Dow ETF in Q4 Earnings?).
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ETFs in Focus on Robust Q4 UnitedHealth Earnings
Before the opening bell yesterday, the largest U.S. health insurer UnitedHealth Group (UNH - Free Report) came up with robust fourth-quarter 2016 results and reaffirmed its outlook for the full year.
Q4 Earnings in Focus
UnitedHealth Group continued its long streak of positive surprise with earnings per share of $2.11 beating the Zacks Consensus Estimate of $2.07. Earnings also came in 50.7%% higher than the year-ago quarter. Revenues rose 9% year over year to $47.5 billion, edging past the Zacks Consensus Estimate of $46.8 billion.
In particular, strong growth across its health insurance lines and Optum health services as well as reduced cost pressure from its ObamaCare exchange business were credited to the strong performance (read: Trump Healthcare Reforms: Will ETFs Gain Health or Suffer?).
UnitedHealth reaffirmed its 2017 outlook with revenues of $197–$199 billion and earnings per share of $9.30–$9.60. The Zacks Consensus Estimate is pegged at $198.63 billion for revenues and $9.50 for earnings per share.
Despite the upbeat results, the stock declined 0.7% at the close on the day. Investors might tap the beaten down prices in the basket form. This is because UnitedHealth has a Zacks Rank #2 (Buy) and boasts a solid Industry rank in the top 27%, underscoring its potential to outperform in the weeks ahead. Additionally, it is a triple play stock with a Value, Growth and Momentum Style Score of A each.
As a result, many investors may want to buy ETFs having the largest allocation to this giant health insurer. For them, iShares U.S. Healthcare Providers ETF (IHF - Free Report) could especially be on radar as UNH takes the top spot in the fund’s portfolio with 13.3% share (see: all the Healthcare ETFs here).
IHF in Focus
This ETF provides exposure to 47 companies that provide health insurance, diagnostics and specialized treatment by tracking the Dow Jones U.S. Select Healthcare Providers Index. About 46.8% of the portfolio is dominated by managed healthcare firms while healthcare services and healthcare facilities round off the top three spots. The fund has amassed $506.9 million in its asset base while volume is moderate at about 89,000 shares per day on average. It charges 44 bps in annual fees and expenses and added 0.1% following the UNH earnings release. The product has a Zacks ETF Rank of 2 or ‘Buy’ rating with a Medium risk outlook.
Other ETFs
Other healthcare ETFs like Health Care Select Sector SPDR Fund (XLV - Free Report) ,Vanguard Health Care ETF (VHT - Free Report) ,iShares U.S. Healthcare ETF (IYH - Free Report) ,John Hancock Multifactor Healthcare ETF and Fidelity MSCI Health Care Index ETF (FHLC - Free Report) also have a decent exposure to UnitedHealth in the range of 4–5%.
Apart from the healthcare space, UNH is among the top 10 holdings in some large cap ETFs such as SPDR Dow Jones Industrial Average ETF (DIA - Free Report) ,WisdomTree LargeCap Value Fund , PowerShares Dynamic Large Cap Growth Portfolio (PWB - Free Report) andFirst Trust Mega Cap AlphaDEX Fund with 5.6%, 3.4%, 3.4% and 3.3% share, respectively (read: What's In Store for Dow ETF in Q4 Earnings?).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>