Stocks
UnitedHealth's Premium Price: Is It Worth Paying Up?
UnitedHealth Group (UNH) is the undisputed leader in the health insurance arena, but it comes at a steep cost. The company's revenue over the last year was $449.71 billion, and its stock has returned +65% in that time.
The performance gap between UNH and its peer group is significant, with an operating margin of 4.2% and twelve-month revenue growth of 9.7%, both tops in its class.
However, this leadership comes at a premium price, with the stock trading at 30.5 times GAAP earnings and 22 times adjusted earnings, far surpassing Cigna's valuation of 11.3 times earnings.
The market is betting on UNH's ability to execute its turnaround story, driven by its large Medicare Advantage business and momentum in its Optum Health services arm.