UnitedHealth Group: The solid US health insurance company.

Last Updated: 11. Januar 2024By

After a brief setback at the beginning of the year, the stock markets have now regained momentum. However, after the high price gains of the past months, the risk of a correction is far from over. Today, I would like to introduce you to a stock that hardly loses ground even in weak stock market times: UnitedHealth Group.

Brief profile UnitedHealth Group is the world’s largest health insurer. With over 440,000 employees, the company generates a steadily increasing revenue, which was around $370 billion in the past year.

Through its various programs, the group has over 150 million insured persons in the United States. In addition, UnitedHealth Group offers health programs for companies, as well as data analysis for the healthcare sector and software solutions and pharmacy services.

Business is booming Since there are no statutory health insurance in the United States – by far the most important market for the company – people there are dependent on private health insurance. The demand for health insurance remains high – as the latest numbers show:

For the third quarter, UnitedHealth Group reported a revenue increase of +14% to $92.4 billion. The revenue of the most important business segment – the Optum health insurance – rose disproportionately by almost +22% to $56.7 billion.

All numbers were above analyst forecasts. This also applies to the adjusted earnings of $6.56 per share (+13%), which exceeded expectations by 24 cents.

Year after year increase in revenue and profit The company continues to grow with impressive consistency. In the past 14 years, both revenue and profit have been increased every single year – and almost always with a double-digit growth rate.

Growth trend continues in the coming years Analysts expect annual revenue growth of almost 10% for the next few years. Profits are expected to increase disproportionately, thus further increasing profit margins. The only risk for the business would be a comprehensive reform of health insurance in the United States. But there are currently no efforts in this direction. Moreover, the divided political landscape in the United States makes major reforms extremely difficult in the next few years.

Stock in long-term uptrend The high stability in business development is reflected in the continuous upward trend of the stock. With the exception of panic selling during the Corona crash in spring 2020, the stock has been spared from major price setbacks in the past decade. Currently, the price is only a few percentage points below its all-time high.

Thanks to the low risk, the stock is particularly suitable for long-term, conservative investors who want to buy their values and leave them for a long time. You should not expect big price gains here. But 10% per year are still possible.