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Here's Why You Should Retain UnitedHealth Group (UNH) Stock
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UnitedHealth Group Incorporated (UNH - Free Report) is gaining from an expanding premium base, contract wins, strength in the Optum business and a solid financial position. An optimistic 2024 earnings per share outlook also reinforces investors’ confidence in the stock.
Zacks Rank & Price Rally
UnitedHealth Group currently carries a Zacks Rank #3 (Hold).
The stock has gained 9.2% in the past year compared with the industry’s 9.1% growth. The Zacks Medical sector has rallied 3.7% and the S&P 500 composite has risen 26.6% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
UNH is well-poised for progress, as evidenced by its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for UnitedHealth Group’s 2024 earnings is pegged at $27.60 per share, which indicates an improvement of 9.9% from the year-ago reported figure. The consensus mark for revenues is $398.1 billion, implying 7.1% growth from the prior-year number.
The consensus estimate for 2025 earnings is pegged at $30.98 per share, suggesting 12.3% growth from the 2024 estimate. The consensus mark for revenues is $426.5 billion, which indicates a rise of 7.1% from the 2024 estimate.
Solid Earnings Surprise History
UNH boasts an impressive earnings surprise record. Its earnings outpaced estimates in each of the trailing four quarters, the average surprise being 3.65%.
Strong Return on Equity
Return on equity in the trailing 12 months is currently 26.5% for UnitedHealth Group, which is higher than the industry’s average of 23.8%. This substantiates the company’s efficiency in utilizing shareholders’ funds.
Impressive Business Outlook for 2024
Adjusted net earnings per share are forecasted to lie between $27.50 and $28.00 in 2024, the mid-point of which indicates an improvement of 10.5% from the 2023 figure.
Business Tailwinds
The 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 from time to time. These affordable plans expand the membership base and fetch growing premiums, which are the most significant contributor to a health insurer.
The beneficial features of the plans have also given several contract wins or renewed agreements to UnitedHealth Group from the federal or state authorities. In April 2024, its Michigan unit won a contract from the Michigan Department of Health and Human Services to serve the Medicaid beneficiaries of the state. Further, an aging U.S. population is likely to sustain the solid demand for UNH’s Medicare plans in the days ahead.
The Optum unit is aided by acquisitions and the utilization of advanced technology, market-leading health analytics, modern care delivery as well as data-driven population health approaches. Optum Health, which is part of the Optum business, estimates to cater to 750,000 additional patients in value-based arrangements in 2024.
UnitedHealth Group has been pursuing a merger and acquisition strategy, which has enhanced its capabilities and expanded 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 to undertake frequent business investments. The same is the case with UnitedHealth Group, which boasts a growing cash balance and sound 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 1.3%.
Tenet Healthcare’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 56.50%. The consensus estimate for THC’s 2024 earnings suggests an improvement of 20.3% from the year-ago figure.
The consensus estimate for THC’s 2024 earnings has moved 4.3% north in the past seven days. Shares of Tenet Healthcare have gained 76.9% in the past year.
Ensign Group’s earnings surpassed estimates in each of the last four quarters, the average surprise being 1.25%. The Zacks Consensus Estimate for ENSG’s 2024 earnings indicates a 13% rise while the same for revenues suggests an improvement of 11% from the respective prior-year figures.
The consensus mark for ENSG’s 2024 earnings has moved 0.2% north in the past seven days. Shares of Ensign Group have gained 29.9% in the past year.
Pennant’s earnings outpaced estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.22%. The Zacks Consensus Estimate for PNTG’s 2024 earnings indicates a 20.6% rise while the consensus mark for revenues suggests an improvement of 16.3% from the respective prior-year figures.
The consensus mark for PNTG’s 2024 earnings has moved up 1.1% in the past 30 days. Shares of Pennant have gained 83.1% in the past year.
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Here's Why You Should Retain UnitedHealth Group (UNH) Stock
UnitedHealth Group Incorporated (UNH - Free Report) is gaining from an expanding premium base, contract wins, strength in the Optum business and a solid financial position. An optimistic 2024 earnings per share outlook also reinforces investors’ confidence in the stock.
Zacks Rank & Price Rally
UnitedHealth Group currently carries a Zacks Rank #3 (Hold).
The stock has gained 9.2% in the past year compared with the industry’s 9.1% growth. The Zacks Medical sector has rallied 3.7% and the S&P 500 composite has risen 26.6% in the same time frame.
Image Source: Zacks Investment Research
Favorable Style Score
UNH is well-poised for progress, as evidenced by its impressive VGM Score of A. Here V stands for Value, G for Growth and M for Momentum, and the score is a weighted combination of all three factors.
Robust Growth Prospects
The Zacks Consensus Estimate for UnitedHealth Group’s 2024 earnings is pegged at $27.60 per share, which indicates an improvement of 9.9% from the year-ago reported figure. The consensus mark for revenues is $398.1 billion, implying 7.1% growth from the prior-year number.
The consensus estimate for 2025 earnings is pegged at $30.98 per share, suggesting 12.3% growth from the 2024 estimate. The consensus mark for revenues is $426.5 billion, which indicates a rise of 7.1% from the 2024 estimate.
Solid Earnings Surprise History
UNH boasts an impressive earnings surprise record. Its earnings outpaced estimates in each of the trailing four quarters, the average surprise being 3.65%.
Strong Return on Equity
Return on equity in the trailing 12 months is currently 26.5% for UnitedHealth Group, which is higher than the industry’s average of 23.8%. This substantiates the company’s efficiency in utilizing shareholders’ funds.
Impressive Business Outlook for 2024
Adjusted net earnings per share are forecasted to lie between $27.50 and $28.00 in 2024, the mid-point of which indicates an improvement of 10.5% from the 2023 figure.
Business Tailwinds
The 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 from time to time. These affordable plans expand the membership base and fetch growing premiums, which are the most significant contributor to a health insurer.
The beneficial features of the plans have also given several contract wins or renewed agreements to UnitedHealth Group from the federal or state authorities. In April 2024, its Michigan unit won a contract from the Michigan Department of Health and Human Services to serve the Medicaid beneficiaries of the state. Further, an aging U.S. population is likely to sustain the solid demand for UNH’s Medicare plans in the days ahead.
The Optum unit is aided by acquisitions and the utilization of advanced technology, market-leading health analytics, modern care delivery as well as data-driven population health approaches. Optum Health, which is part of the Optum business, estimates to cater to 750,000 additional patients in value-based arrangements in 2024.
UnitedHealth Group has been pursuing a merger and acquisition strategy, which has enhanced its capabilities and expanded 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 to undertake frequent business investments. The same is the case with UnitedHealth Group, which boasts a growing cash balance and sound 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 1.3%.
Stocks to Consider
Some better-ranked stocks in the Medical space are Tenet Healthcare Corporation (THC - Free Report) , The Ensign Group, Inc. (ENSG - Free Report) and The Pennant Group, Inc. (PNTG - Free Report) . Tenet Healthcare currently sports a Zacks Rank #1 (Strong Buy), and Ensign Group and Pennant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Tenet Healthcare’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 56.50%. The consensus estimate for THC’s 2024 earnings suggests an improvement of 20.3% from the year-ago figure.
The consensus estimate for THC’s 2024 earnings has moved 4.3% north in the past seven days. Shares of Tenet Healthcare have gained 76.9% in the past year.
Ensign Group’s earnings surpassed estimates in each of the last four quarters, the average surprise being 1.25%. The Zacks Consensus Estimate for ENSG’s 2024 earnings indicates a 13% rise while the same for revenues suggests an improvement of 11% from the respective prior-year figures.
The consensus mark for ENSG’s 2024 earnings has moved 0.2% north in the past seven days. Shares of Ensign Group have gained 29.9% in the past year.
Pennant’s earnings outpaced estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.22%. The Zacks Consensus Estimate for PNTG’s 2024 earnings indicates a 20.6% rise while the consensus mark for revenues suggests an improvement of 16.3% from the respective prior-year figures.
The consensus mark for PNTG’s 2024 earnings has moved up 1.1% in the past 30 days. Shares of Pennant have gained 83.1% in the past year.