UnitedHealth Group has the highest price per share of any company on the Dow Jones Industrial Average and is the tenth largest stock on the S&P 500.
In fact, UnitedHealth is not only the largest healthcare corporation in the United States based on market capitalization and revenue, but also larger than JPMorgan Chase, the nation’s largest bank.
And it’s a Wall Street darling, with experts optimistic about the company’s future: 22 out of 25 analysts now think it’s a buy.
“If I had to pick one stock, just one to buy, I’d buy United[Health]”, said Ana Gupte, principal at AG Health Advisors.
Lance Wilkes, managing director and senior research analyst at Bernstein Research, said UnitedHealth “has outperformed the rest of the stock for two reasons”. “One is strategic vision and the other is strategic capital management.”
UnitedHealth has grown its annual revenue since 2012 to more than $100 billion, when adjusted for inflation. It achieves this by engaging in a unique acquisition strategy. It started with smaller deals that have grown while many of UnitedHealth’s competitors like Aetna and Humana or National Anthem and Cigna tried to broker much larger ones, but were stopped by the regulators.
In contrast, UnitedHealth leaned toward a vertical integration strategy, acquiring smaller companies and building them into its growing healthcare business.
Gupte said UnitedHealth’s size makes it “relatively immune to economic cycles” due to the company’s diversity. “It makes it very attractive from a business cycle and macro-environment perspective.”
Until recently, its acquisition strategy has allowed it to grow without too much scrutiny from regulators. But in January 2021, UnitedHealth and Change Healthcare announced an all-cash deal worth nearly $8 billion. challenged by the Ministry of Justice due to antitrust concerns.
Healthcare companies are “more and more [like] utilities,” said Wilkes. “So I think they’re going to have a huge market share because … you wouldn’t want redundant services going through the system.”
“I think at this point, we’re going to see UnitedHealth Group as more like… the core health infrastructure at the time,” said Matt Stoller, research director for the American Economic Liberties Project and author of the book. This is in America”. “Goliath: The Hundred Years’ War Between Monopolistic Power and Democracy.” “It’s Too Big to Manage.”
UnitedHealth Group is committed to improving the health system for everyone, promoting evidence-based practices, and aligning incentives system-wide to ensure everyone gets the right care at the right time and in the right place,” UnitedHealth said. Group told CNBC.
“Because we serve people in every aspect of the health system, we have a unique ability to identify opportunities to better integrate care and benefits, develop solutions, and develop solutions.” deploy them at scale to improve accessibility, reduce costs, and deliver a better experience for patients and service providers,” it said.
See videotapes above to learn how UnitedHealth Group has grown and what that means for the US healthcare system.
