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UnitedHealth:
Safe Haven for Equity Investors Drop

UnitedHealth Group's (NYSE: UNH) fourth-quarter financials were better than expected, analysts at Value Line stated.

The company, headquartered in Minnetonka, Minnesota, is a diversified health/well-being company offering medical insurance and other services. It has a market capitalization of roughly $440 billion, employs 350,000 individuals, and has been a component of the Dow Jones Industrial Average since June of 2012, replacing Kraft Foods in that prestigious index, that is no longer limited to manufacturing industries, notes The Value Line Investment Survey newsletter.

“Overall, the insurance giant closed out 2021 in fine fashion, thanks to progress in both its legacy health insurance and its Optum health services businesses. Looking to the year ahead, we believe the top and bottom lines will grow a respective 3% and 10%-15%. Although the lingering effects of the COVID-19 Omicron variant may remain somewhat of a business challenge, solid growth at the UnitedHealthcare and Optum arms, as well as the organization’s strong position in the Medicare Advantage space, ought to bolster the company’s near-term prospects.

Meanwhile, the Change Healthcare acquisition is still pending. UnitedHealth pushed the deadline for completion out to April 5th, which should provide more time for the combination to earn regulatory approval. In the interim, Change is considering divesting assets, such as its payment integrity business, to help speed up the review process.

This issue’s capital appreciation potential is seen as being somewhat limited for the coming 18 months and over the 2025-2027 pull, given its current valuation. For conservative investors, the company’s strong record (Safety: 1) adds investment appeal.

The company also garners top marks for Financial Strength (A++) and the stock features an excellent score for Earnings Predictability. With the recent stock market volatility, UnitedHealth stock may represent a safe haven for equity investors, in our view.

These top-quality shares remain a timely selection. Longer-term accounts do not have much to get excited about at the moment, though, adds analyst Erik M. Manning.

Editor’s Note: The Value Line Investment Survey covers approximately 1,700 large-,mid-, and small cap stocks in more than 90 industries, representing about 90% of the total U.S. stock market capitalization. For more information, visit www.valueline.com.

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