Critical Comparison: UnitedHealth Group (UNH) and Its Peers

UnitedHealth Group (NYSE: UNH) is one of 14 publicly-traded companies in the “Managed Health Care” industry, but how does it weigh in compared to its competitors? We will compare UnitedHealth Group to similar companies based on the strength of its dividends, analyst recommendations, valuation, earnings, profitability, institutional ownership and risk.

Risk and Volatility

UnitedHealth Group has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, UnitedHealth Group’s competitors have a beta of 0.76, meaning that their average stock price is 24% less volatile than the S&P 500.

Earnings & Valuation

This table compares UnitedHealth Group and its competitors top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
UnitedHealth Group $196.63 billion $16.14 billion 23.57
UnitedHealth Group Competitors $52.70 billion $3.80 billion 18.36

UnitedHealth Group has higher revenue and earnings than its competitors. UnitedHealth Group is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

UnitedHealth Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.4%. UnitedHealth Group pays out 33.3% of its earnings in the form of a dividend. As a group, “Managed Health Care” companies pay a dividend yield of 0.9% and pay out 20.7% of their earnings in the form of a dividend. UnitedHealth Group has raised its dividend for 7 consecutive years.

Profitability

This table compares UnitedHealth Group and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UnitedHealth Group 4.50% 21.52% 6.99%
UnitedHealth Group Competitors 1.70% 10.28% 3.36%

Institutional and Insider Ownership

86.1% of UnitedHealth Group shares are held by institutional investors. Comparatively, 90.3% of shares of all “Managed Health Care” companies are held by institutional investors. 0.9% of UnitedHealth Group shares are held by insiders. Comparatively, 2.4% of shares of all “Managed Health Care” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for UnitedHealth Group and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UnitedHealth Group 0 0 22 0 3.00
UnitedHealth Group Competitors 79 880 1442 23 2.58

UnitedHealth Group currently has a consensus target price of $216.57, indicating a potential upside of 1.87%. As a group, “Managed Health Care” companies have a potential downside of 4.41%. Given UnitedHealth Group’s stronger consensus rating and higher probable upside, research analysts plainly believe UnitedHealth Group is more favorable than its competitors.

Summary

UnitedHealth Group beats its competitors on 10 of the 15 factors compared.

About UnitedHealth Group

UnitedHealth Group Incorporated is a health and well-being company. The Company operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. It conducts its operations through two business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum. UnitedHealthcare provides healthcare benefits to an array of customers and markets, and includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global businesses. Optum is a health services business serving the healthcare marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. OptumInsight provides services, technology and healthcare solutions to participants in the healthcare industry. OptumRx provides retail network contracting, purchasing and clinical solutions.

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