S&P 500   3,741.80 (-0.71%)
DOW   30,853.89 (-0.23%)
QQQ   300.18 (-1.29%)
AAPL   118.73 (-1.17%)
MSFT   227.17 (+0.19%)
FB   258.48 (+0.33%)
GOOGL   2,039.27 (+0.26%)
TSLA   567.35 (-8.70%)
AMZN   2,918.60 (-1.98%)
NVDA   474.65 (-4.07%)
BABA   230.23 (-0.12%)
CGC   29.05 (-6.32%)
GE   13.32 (-1.84%)
MU   84.48 (+0.18%)
NIO   34.60 (-11.91%)
AMD   75.35 (-3.09%)
T   29.42 (+1.73%)
F   11.90 (-0.25%)
ACB   8.96 (-8.76%)
DIS   185.12 (-1.55%)
BA   218.45 (-2.79%)
NFLX   502.77 (-1.67%)
BAC   36.50 (+0.00%)
S&P 500   3,741.80 (-0.71%)
DOW   30,853.89 (-0.23%)
QQQ   300.18 (-1.29%)
AAPL   118.73 (-1.17%)
MSFT   227.17 (+0.19%)
FB   258.48 (+0.33%)
GOOGL   2,039.27 (+0.26%)
TSLA   567.35 (-8.70%)
AMZN   2,918.60 (-1.98%)
NVDA   474.65 (-4.07%)
BABA   230.23 (-0.12%)
CGC   29.05 (-6.32%)
GE   13.32 (-1.84%)
MU   84.48 (+0.18%)
NIO   34.60 (-11.91%)
AMD   75.35 (-3.09%)
T   29.42 (+1.73%)
F   11.90 (-0.25%)
ACB   8.96 (-8.76%)
DIS   185.12 (-1.55%)
BA   218.45 (-2.79%)
NFLX   502.77 (-1.67%)
BAC   36.50 (+0.00%)
S&P 500   3,741.80 (-0.71%)
DOW   30,853.89 (-0.23%)
QQQ   300.18 (-1.29%)
AAPL   118.73 (-1.17%)
MSFT   227.17 (+0.19%)
FB   258.48 (+0.33%)
GOOGL   2,039.27 (+0.26%)
TSLA   567.35 (-8.70%)
AMZN   2,918.60 (-1.98%)
NVDA   474.65 (-4.07%)
BABA   230.23 (-0.12%)
CGC   29.05 (-6.32%)
GE   13.32 (-1.84%)
MU   84.48 (+0.18%)
NIO   34.60 (-11.91%)
AMD   75.35 (-3.09%)
T   29.42 (+1.73%)
F   11.90 (-0.25%)
ACB   8.96 (-8.76%)
DIS   185.12 (-1.55%)
BA   218.45 (-2.79%)
NFLX   502.77 (-1.67%)
BAC   36.50 (+0.00%)
S&P 500   3,741.80 (-0.71%)
DOW   30,853.89 (-0.23%)
QQQ   300.18 (-1.29%)
AAPL   118.73 (-1.17%)
MSFT   227.17 (+0.19%)
FB   258.48 (+0.33%)
GOOGL   2,039.27 (+0.26%)
TSLA   567.35 (-8.70%)
AMZN   2,918.60 (-1.98%)
NVDA   474.65 (-4.07%)
BABA   230.23 (-0.12%)
CGC   29.05 (-6.32%)
GE   13.32 (-1.84%)
MU   84.48 (+0.18%)
NIO   34.60 (-11.91%)
AMD   75.35 (-3.09%)
T   29.42 (+1.73%)
F   11.90 (-0.25%)
ACB   8.96 (-8.76%)
DIS   185.12 (-1.55%)
BA   218.45 (-2.79%)
NFLX   502.77 (-1.67%)
BAC   36.50 (+0.00%)
Log in

UnitedHealth (NYSE:UNH) Posts a Win in Revenue and Earnings

Wednesday, January 20, 2021 | Steve Anderson
UnitedHealth (NYSE:UNH) Posts a Win in Revenue and Earnings

It's one of the strangest phenomena in all of trading; sometimes a company can do well enough to beat estimates, but that's still not enough to give the company much of an edge in trading. That's what happened to UnitedHealth Group (NYSE:UNH) recently as it not only brought in beats in earnings and revenue, but also offered a positive outlook on 2021, yet lost ground in early trading, much of which it recovered throughout the morning.

The Good News and the Bad News

There was a lot of good news for UnitedHealth as the company reported quarterly earnings of $2.52 per share, nicely above estimates of $2.41 established previously. Group revenues also rose in the quarter, coming in right around estimated totals. The company even managed to hold its 2021 profit forecast issued back in December, looking for full-year adjusted net earnings to run between $17.75 and $18.25.

Further good news came out of the company's circumstances. With so many procedures needing to be deferred for hospital and clinic shutdowns back in the early going of 2020, that left a lot of premiums going to not much at all, reports noted.

The bad news, however, was that pandemic-related costs did make for a hit in UnitedHealth's books. Treatment and testing costs, unemployment, and similar factors made for a loss of about $1.80 per share, reports noted, as the insurer worked to absorb losses therein. Yet even these losses represented an improvement; the fourth quarter saw what's known as a “medical loss ratio” of 79.1%. That compares well to the 82.5% seen a year ago. A “medical loss ratio” is the portion of user premiums paid out in healthcare costs.

Very Thinly Restrained Analyst Optimism

Meanwhile, based on our latest research, the analyst community is urging a “buy” in strong terms, though somewhat on the decline of late. The company currently has five “hold” ratings, 15 “buy” ratings and one “strong buy” rating to its credit, which is the same proportion of analysis that we saw a month ago. This sounds great, because it is, but oddly it's not as great as it was. Three months ago, there were four “hold” ratings and 20 “buy” along with one “strong buy.” Six months ago it was even better with just three “hold” alongside the 20 “buy” and the one “strong buy.” There hasn't been a “sell” recommendation on the stock in the last six months.

The consensus price target has been merrily climbing as well. Six months ago, it was at $338.46, before going to $346.68 three months ago. A month ago, it continued its upward cant to reach $380.55 before hitting $385.32, where it sits today. Interestingly, each price target represents upside potential, but a steadily decreasing upside, suggesting that we're getting close to equilibrium.

Health Insurance Is Usually a Good Buy

Buying in on an insurer is usually a pretty good buy for investors. The point that most of us who pay for insurance have long since realized is what makes the deal so good for those who own insurers: most of the time, we're paying for nothing. At best, we're paying for peace of mind. This is good news, as a whole; it's one of the few things we buy that we hope we never actually have to use.

This has been an unusual year for an insurer, and it's also not likely to be a year that's repeated in any significant way, so looking for future figures to turn out like these figures did is going to be a bad idea. There's little chance that hospitals will once again be required to shut down for coronavirus-related issues, so the hefty gains of unused premiums aren't likely to hit either.

But UnitedHealth is working toward building a future that's less focused on a single issue; one of the biggest new moves is a partnership with Amwell (NYSE:AMWL), which will ultimately build a virtual primary care system. This opens up the possibility for patients to connect to doctors with little or no co-pay cost for routine care options. Telemedicine optionshave been huge during the pandemic, and even as the coronavirus shows signs of retracting as new treatments and vaccines emerge, it's a safe bet that a robust telemedicine option in place will still be used.

The circumstances that gave UnitedHealth a great 2020 aren't likely to be repeated with 2021's arrival. However, UnitedHealth likely knows that as well, and has made plans accordingly to insulate itself and continue making gains accordingly. That's good news for investors, and anyone who picks up a piece of UnitedHealth will likely be able to enjoy the same kind of peace of mind that its primary product line provides.

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
UnitedHealth Group (UNH)2.7$340.49+2.0%1.47%19.56Buy$387.82
Compare These Stocks  Add These Stocks to My Watchlist 


20 High-Yield Dividend Stocks that Could Ruin Your Retirement Portfolio

Almost everyone loves a company that pays strong dividends. Who doesn't like receiving a check every quarter for simply owning a stock--especially if that stock is paying you back 4%, 5% or even 10% of its share price in annual income each year?. In a world where 10-year treasuries are yielding just above 2%, it seems hard to go wrong when buying a stock that's yielding significantly above the going rates on fixed-income assets. Unfortunately, the market rarely offers a free lunch.

While high-yield stocks may have a lot of near-term attractiveness, those same high-yields can often signal significant danger ahead. In some cases, it might mean that the company's dividend will stop growing or won't grow as fast as it used to. Worse yet, the company could cut its dividend, reduce the income you receive from owning the stock and drive down the value of the shares that you own.

4%-plus yields might seem like an easy opportunity to boost the investment income you receive, but high-yield stocks can just as often be a track reading to snare unsuspecting investors. It's not always easy to tell the difference though.

This slideshow highlights 10 high-yield dividend stocks that are paying an unsustainably large percentage of their earnings in the form of a dividend. These companies are all paying out more than 100% of their earnings per share in the form of a dividend, a sign that the advertised high-yield probably won't last.

View the "20 High-Yield Dividend Stocks that Could Ruin Your Retirement Portfolio".

Enter your email address below to receive a concise daily summary of analysts' upgrades, downgrades and new coverage with MarketBeat.com's FREE daily email newsletter.