UnitedHealth Group Incorporated (NYSE: UNH)
At a market cap of $500 billion, UnitedHealth is already a top company in the healthcare industry. UnitedHealth Group Incorporated is an American multinational managed healthcare and insurance company based in Minnetonka, Minnesota. It offers healthcare products and insurance services. Having recently released exceptional Q3 results that beat analysts’ expectations, UnitedHealth Group Incorporated saw an increase in mentions by 67%, prompting investors to wonder what makes the company gain so much hype. Currently, shares of UnitedHealth Group Incorporated trade at $544.93 each.
Considering the overall market is down 24% year to date, pretty remarkable that shares of UnitedHealth are in positive territory, and with that came a lot of positive hype. Here are some reasons why.
UnitedHealth Group's third-quarter profits and revenue came in higher than expected. The health insurer also raised guidance, they raised their earnings outlook by $0.30.
There was a 12% increase in third-quarter revenue, that's on a growing number of members in their network; growth of 11% from the UnitedHealthcare business, which served an additional 850,000 people in the third quarter.
In the third quarter (ended Sept. 30), its sales totalled $80.9 billion and rose 12% year over year.
The company's customer base has been increasing, with UnitedHealthcare reporting a 185,000 increase in people served in the domestic market this past quarter.
The company also boosted its full-year EPS forecast to a $21.85-$22.05 range, up from $21.40 to $21.90, and higher than the consensus of $21.87.
The business now projects its diluted earnings per share to come in between $20.85 to $21.05, up from its previous forecast of $20.45 to $20.95.
As of the end of September, UnitedHealth reported $38.8 billion in cash and cash equivalents. The company's payout ratio currently sits at a modest 30% of profits.
Inclusive of its dividend, UnitedHealth has produced 18 positive returns for its shareholders over the past two decades.
The ratio - a percentage of premiums versus payouts on claims - improved to 81% from 83% last year. Analysts had expected 82.4%. Excluding items, UnitedHealth earned $5.79 per share, beating estimates of $5.42.
Although UnitedHealth has recently seen huge successes in terms of performance, there are still some reasons it might not be the best time to invest in the company. Here are two of them.
Luckily, there’s not much in the name of negative hype factors for UnitedHealth however, there is the chance that recovery in non-urgent procedures could slow due to inflation and labour shortages which could lead to lower profits.
UnitedHealth's shares are not very cheap, trading at almost $550 per share right now.
UnitedHealth's strong financials put it in excellent shape to continue pursuing growth while also expanding its dividend payments. The company remains focused on growth, and that is a crucial ingredient for a stock to rise in value in the long term and generate strong returns for investors. UnitedHealth is a staple in the healthcare industry, and with a growing population of seniors, demand for its services isn't likely to drop off anytime soon.
HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.
The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.