Stock (Symbol) |
UnitedHealth (UNH) |
Stock Price |
$195 |
Sector |
| Healthcare |
Data is as of |
| August 4, 2017 |
Expected to Report |
| Oct 16 |
Company Description |
 UnitedHealth is a health and well-being company. The Company’s business platforms include UnitedHealthcare and Optum. UnitedHealthcare provides health care benefits to various customers and markets. Optum is a health services business serving the health care marketplace, including payers, care providers, employers, Governments, life sciences companies and consumers. UNH has 4 segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. OptumHealth is a health and wellness business serving the physical, emotional and financial needs of individuals. OptumInsight provides technology, operational and consulting services to participants in the health care industry. OptumRx is a pharmacy benefit manager. Purchased Catamaran 3/30/15. Source: Thomson Financial |
Sharek’s Take |
 UnitedHealth (UNH) is like a machine — a making money machine. It has gone into healthcare insurance, made it efficient, and branched out into other areas like analytics with its Optum division to cut costs via preventative measures. Optum has multiple departments to keep you healthy:
Optum is an added option when companies purchase UnitedHealth insurance. Plus, organizations can get it without the health insurance attached. Optum — which is around 40% of overall profits — has been disrupting the industry while signing deals and getting business left-and-right. UnitedHealth left the Obamacare program last year because it wasn’t making money. UNH is a machine, a well oiled machine that uses smarts –> efficiencies to profit in healthcare. The stock is in the DJIA. I consider it very safe. Management just increased the dividend to $3 a year (a heavy dividend). The yield is 1.5%. And the Est. LTG is a solid 15%. UNH is on a roll beating the street, upping estimates, and delivering at least 23% profit growth the last 4 qtrs and has a reasonable P/E of 20. UnitedHealth is like a machine, and lately the stock has been on a conveyer-like rise. UNH left the Obamacare program last year, which was costing the nation’s largest health insurer around 4% of profits. This stock should appeal to all-types of stock investors. |
One Year Chart |
 Just an incredible run the stock’s been on in the last year, and it was pretty easy to see that was coming. Strong profit growth as the P/E was in the high-teens. Safe stock, dividend. There’s a lot of green in this table — and that’s good. What I like most is the P/E of just 18. Qtly profits are expected to be 21%, 18%, 18% and 5% the next 4 qtrs. Since UNH has been beating the street, I expect these figures are too low, especially the 4QtrsOut estimate which analysts now need to up after the big beat last qtr. |
Fair Value |
 To me, this stock should sell for 21x earnings. Yet the P/E is a modest 18. That gives the stock upside in both the short-term and long-term. Notice how UNH had a very low P/E five-to-eight years ago. Wow it was such a bargain — yet I didn’t follow it because it wasn’t growing 20% per year. Ugh. |
Bottom Line |
 UnitedHealth has been like a machine this past decade, and excellent execution continues to this day. UNH appeals to lots of fund types — high profit growth, safe dividend payer, GARP — and that means more eyes looking to buy. Profits are growing strong and with a P/E of just 20 I expect this stock to continue higher baring a market correction. UNH ranks 2nd in the Conservative Growth Portfolio Power Rankings and 8th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
8 of 33Aggressive Growth Portfolio 8 of 16Conservative Stock Portfolio 2 of 32 |
