Here's How Much a $1000 Investment in UnitedHealth Group Made 10 Years Ago Would Be Worth Today
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in UnitedHealth Group (UNH) ten years ago? It may not have been easy to hold on to UNH for all that time, but if you did, how much would your investment be worth today?
UnitedHealth Group's Business In-Depth
With that in mind, let's take a look at UnitedHealth Group's main business drivers.
UnitedHealth Group, Inc. provides a wide range of health care products and services, such as health maintenance organizations (HMOs), point of service plans (POS), preferred provider organizations (PPOs), and managed fee-for-service programs.
UnitedHealth has the largest and most diverse membership base within the managed-care organization market, which gives it significant competitive advantages. It has built its prescription drug business through OptumRx division, with the acquisition of Catamaran. The company has acquired a number of competing healthcare providers. These acquisitions have transformed it from a pure health insurer to a comprehensive healthcare provider.
UnitedHealth reports through two segments: UnitedHealthcare and Optum. Its strategy is to meld the provision of medical care from its Optum unit with UnitedHealthcare brand insurance products, which help in cross-selling of products and services. The company is consistently working toward expanding both these units to reach more clients, in turn boosting its growth possibilities.
UnitedHealthcare (contributed 58.9% of revenues in 2021) is divided into UnitedHealthcare Employer & Individual; UnitedHealthcare Medicare & Retirement; UnitedHealthcare Community & State and UnitedHealthcare Global. This segment is responsible for providing health care benefits globally. It serves individuals as well as employers. Medicare and Medicaid beneficiaries consist a large chunk of its client list.
Optum (41.1%) is a technology-enabled health services business serving the broad health care marketplace, including those who need care: the consumers who need the right support, information, resources and products; those who provide care: pharmacies, hospitals, physicians, practices and other health care facilities. The segment is divided into OptumHealth, OptumInsight, OptumRx and Optum eliminations.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in UnitedHealth Group ten years ago, you're likely feeling pretty good about your investment today.
A $1000 investment made in April 2012 would be worth $9,158.58, or a gain of 815.86%, as of April 20, 2022, according to our calculations. This return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 224.07% and gold's return of 13.97% over the same time frame.
Looking ahead, analysts are expecting more upside for UNH.
UnitedHealth’s shares have outperformed the industry in a year. Its top line has been growing and the momentum should continue in the years ahead on the back of a strong market position and an attractive core business that continues to be driven by new deals, renewed agreements and expansion of service offerings. For 2022, it expects revenues in the range of $317-$320 billion. Its solid health services segment provides diversification benefits. UnitedHealth reported strong first-quarter 2022 results thanks to growth in its business segments. A sturdy balance sheet enables investments and prudent capital deployment through share buybacks and dividends. However, softness in commercial business due to the COVID-induced volatilities persists. Also, rising operating costs are hurting its profits. As such, the stock warrants a cautious stance.
Over the past four weeks, shares have rallied 6.41%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
To read this article on Zacks.com click here.
