We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Hold Strategy is Apt For UnitedHealth Group (UNH)
Read MoreHide Full Article
UnitedHealth Group Incorporated (UNH - Free Report) has been gaining momentum from its two business segments — UnitedHealthcare and Optum. Growing telehealth services and robust cash flows have also been aiding the stock.
The company boasts of an impressive earnings surprise history. It has surpassed estimates in each of the trailing four quarters, the average surprise being 15.22%.
As of Sep 30, 2020, UnitedHealth Group’s trailing 12-month return on equity (ROE) of 27.5% has not only improved for the past five years but remains higher than the industry’s figure of 24.5%. This highlights the company’s tactical utilization of shareholders’ funds. Also, the company has a Value Score of B, which reflects an attractive valuation of the stock.
What’s Driving the Stock?
UnitedHealth Group issued an updated outlook for this year in the beginning of this month, which bodes well for investors. Adjusted net earnings per share (EPS) are now expected to reach $16.75, which indicates an improvement of 10.9% from the 2019 reported figure. Revenues for this year are anticipated to be around $257 billion, thereby suggesting growth of 6.1% from the prior-year reported figure. It reiterated the long-term outlook for its EPS to be between 13-16% per annum, on average. Also, the Zacks Consensus Estimate for the company’s current-year earnings and revenues is expected to grow 11.1% and 6.1%, respectively.
Moreover, the healthcare provider has been benefiting from growing revenues, which have witnessed a 10-year CAGR of 9.9%. The top line has been driven by the company’s two business segments. While UnitedHealthcare has been offering a diversified range of health benefit programs for employers and individuals across the United States, Optum stretches itself beyond traditional pharmacy benefit management and strives to provide whole-person care for its members directly through local medical groups and ambulatory care systems. The two businesses, however, share the same goal of providing enhanced health outcomes at lower costs.
Through the diversified health plans, UnitedHealth Group has been delving constantly into government-sponsored programs, including Medicare Advantage and Medicaid. The company’s 2021 Medicare Advantage plans bears testament to the same in which it is likely to undergo the largest Medicare Advantage footprint extension in five years. While an aging U.S. population is likely to provide a boost to the company’s Medicare business, the Medicaid business is anticipated to keep growing as several states focus on providing managed care particularly for individuals grappling with complex care needs.
Furthermore, the healthcare provider has been making every effort to enhance existing suite of telehealth services, which has gained prominence amid the COVID-19 pandemic. Through these services, patients plagued with health woes could seek the advice of healthcare providers virtually without exposing themselves to the virus. The company not only boasts of a strong vision network but also has launched teledentistry services aimed at oral health improvements of members. Other stocks in the same space, namely Teladoc Health, Inc. (TDOC - Free Report) , Humana Inc. (HUM - Free Report) and Magellan Health, Inc. , have also developed telehealth services.
Additionally, the company is backed by strong balance sheet. Robust cash generating abilities not only enable the company to undertake acquisitions but also help it to return value to shareholders through buybacks and dividend payments. Cash flows from operations are anticipated between $20 billion and $21 billion in 2021.
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
Here's Why Hold Strategy is Apt For UnitedHealth Group (UNH)
UnitedHealth Group Incorporated (UNH - Free Report) has been gaining momentum from its two business segments — UnitedHealthcare and Optum. Growing telehealth services and robust cash flows have also been aiding the stock.
The company boasts of an impressive earnings surprise history. It has surpassed estimates in each of the trailing four quarters, the average surprise being 15.22%.
As of Sep 30, 2020, UnitedHealth Group’s trailing 12-month return on equity (ROE) of 27.5% has not only improved for the past five years but remains higher than the industry’s figure of 24.5%. This highlights the company’s tactical utilization of shareholders’ funds. Also, the company has a Value Score of B, which reflects an attractive valuation of the stock.
What’s Driving the Stock?
UnitedHealth Group issued an updated outlook for this year in the beginning of this month, which bodes well for investors. Adjusted net earnings per share (EPS) are now expected to reach $16.75, which indicates an improvement of 10.9% from the 2019 reported figure. Revenues for this year are anticipated to be around $257 billion, thereby suggesting growth of 6.1% from the prior-year reported figure. It reiterated the long-term outlook for its EPS to be between 13-16% per annum, on average. Also, the Zacks Consensus Estimate for the company’s current-year earnings and revenues is expected to grow 11.1% and 6.1%, respectively.
Moreover, the healthcare provider has been benefiting from growing revenues, which have witnessed a 10-year CAGR of 9.9%. The top line has been driven by the company’s two business segments. While UnitedHealthcare has been offering a diversified range of health benefit programs for employers and individuals across the United States, Optum stretches itself beyond traditional pharmacy benefit management and strives to provide whole-person care for its members directly through local medical groups and ambulatory care systems. The two businesses, however, share the same goal of providing enhanced health outcomes at lower costs.
Through the diversified health plans, UnitedHealth Group has been delving constantly into government-sponsored programs, including Medicare Advantage and Medicaid. The company’s 2021 Medicare Advantage plans bears testament to the same in which it is likely to undergo the largest Medicare Advantage footprint extension in five years. While an aging U.S. population is likely to provide a boost to the company’s Medicare business, the Medicaid business is anticipated to keep growing as several states focus on providing managed care particularly for individuals grappling with complex care needs.
Furthermore, the healthcare provider has been making every effort to enhance existing suite of telehealth services, which has gained prominence amid the COVID-19 pandemic. Through these services, patients plagued with health woes could seek the advice of healthcare providers virtually without exposing themselves to the virus. The company not only boasts of a strong vision network but also has launched teledentistry services aimed at oral health improvements of members. Other stocks in the same space, namely Teladoc Health, Inc. (TDOC - Free Report) , Humana Inc. (HUM - Free Report) and Magellan Health, Inc. , have also developed telehealth services.
Additionally, the company is backed by strong balance sheet. Robust cash generating abilities not only enable the company to undertake acquisitions but also help it to return value to shareholders through buybacks and dividend payments. Cash flows from operations are anticipated between $20 billion and $21 billion in 2021.
Shares of this Zacks Rank #3 (Hold) company have gained 17.4% in a year compared with the industry’s rally of 7.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>