Stock (Symbol) |
United Health (UNH) |
Stock Price |
$163 |
Sector |
| Healthcare |
Data is as of |
| January 29, 2017 |
Expected to Report |
| Apr 16 |
Company Description |
 UnitedHealth Group Incorporated 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. The Company’s business platforms have four 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) has been a fabulous stock during the past year, as it rose from around $120 to $160. Leaving Obamacare helps as it was costing the nation’s largest health insurer around 4% of profits, or $0.35 a share in 2016 profits. But the big driver for growth is its Optum divisions (see above), which “keep you healthy” and provide 42% of company profits. Optum is an added option when companies purchase UnitedHealth insurance, but companies can get it without the health insurance attached. Optum has relationships with Walgreen’s and now CVS to make picking up prescriptions easy. Optum grew revenue 24% last year, as the UnitedHealth division grew sales 13%, as it brought in Medicare and Madicaid enrollments and got rid of Obamacare. UnitedHealth is one of the world’s safest stocks, and yields close to 2%. It paid out more than $2 billion in dividends in 2016, and bought back over $1 billion in shares. This company has clean annual reports, which I appreciate. That shows honesty. UNH is part of the Dow and comes with a plump 16% Est LTG. AND the P/E is just 17, which is under my Fair Value of 19. All-in-all this stock continues to be an excellent selection for most any equity investor. |
One Year Chart |
 Last qtr UNH grew sales 18% for the 2nd straight qtr and profits increased 51% on the back of an easy comparison from last year (UNH is more of a 18-20% grower). UNH has beaten analyst estimates in all but one qtr the past 3 yrs, and it was that year-ago period when it missed. With a P/E of 17, this stock is very reasonable. And for good growth too (Est. LTG of 16% a year). Qtly profits are expected to clock in at 20%, 19%, 18% and 17% the next 4 qtrs. These all jumped this qtr, and UNH has been beating the street, so UNH could overdeliver. Either way this news will keep the stock timely. |
Fair Value |
 What’s amazing about this stock is profit estimates are jumping higher. 2016’s estimates have ballooned from $7.86 to $7.91, $8.01 and now $9.52 the last 4 qtrs. 2017 estimates have jumped from $8.93 to $10.66 over that span. So UNH might not be selling for 17x earnings, it might be around 15x. Who knows until 2017 ends. The top stocks in the market have historically had big increases in profit estimates, making them cheaper-at-the-time when you look back at them. |
Bottom Line |
 UnitedHealth is a top-tier growth stocks for investors who don’t like to take chances. Aggressive investors should like it too, as the combination of 18% profit growth plus a rising P/E could result in +20% growth this year. Plus close to a 2% yield. UNH ranks 3rd in the Conservative Growth Portfolio Power Rankings and 6th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
6 of 33Aggressive Growth Portfolio 6 of 18Conservative Stock Portfolio 3 of 30 |
