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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Unitedhealth Group Incorporated (XNYS:UNH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
UNH
Name:
UNITEDHEALTH GROUP INCORPORATED (XNYS:UNH)
Sector:
4.76B
Industry:
Healthcare Plans
CEO:
Mr. Andrew Witty
Total Employees:
350,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -238.77% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF UNITEDHEALTH GROUP INCORPORATED(UNH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND HEALTHCARE PLANS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
516.35
One Month Price Target:
$518.58
Six Month Price Target :
$529.74
Likely Price in One Year's Time:
Ticker:
$543.13
Likely Trading Range Today Under (Normal Volatility)
$515.06
Price Upper limit ($) :
$518.79
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$494.36
This week:
$467.19
This month :
$418.03
Other Primary facts
Market Cap:
484.66B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
935.38M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.8%
-17.28%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$618.23
$570.61
$414.47
$462.09
Medium risk (<10%) entry points
Buy Call
Sell Call
$555.12
Buy Put:
Sell Put:
$544.95
$477.45
$487.75
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
UNH
Sharpe Ratio:
4.83%
Comparison:
UNH, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 22.42% higher than the industry
& ratio is 111.82% higher than the market/S&P 500 average
Average Returns/Yield of
UNH
Daily returns:
0.11%
Weekly returns:
0.56%
Monthly returns:
2.23%
Yearly returns:
24.40%
Comparison of returns:
Average annual returns/yield (last 3 years) is 9.74% above industry average
Classification:
UNH, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.5
Statistical test of Returns:
UNH has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.13%
Weekly Volatility:
4.76%
Monthly Volatility:
9.51%
Yearly Volatility:
32.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.08%
Volatility in last five trading days has been -49.31% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.26%
Weekly VaR:
-9.52%
Monthly VaR:
-19.04%
How Much Can the price of
UNH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-65.96%
This translates to price declining to:
$436.03
This translates to price declining to:
$175.76
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
UNH is a 34.39% riskier investment compared to the market/S&P 500 & is 15.14% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -8.57% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
UNH
Beta in relation to market/S&P 500--0.77
Expected beta in 1 year's time:
0.614
Expected beta in 3 year's time:
0.868
Unlevered (debt free) Beta:
0.534
Beta in relation to Nasdaq (XNAS):
0.711
Beta in relation to all global stocks::
0.868
Beta Comparison & Analysis
Beta of competitors/peers::
0.607
Beta is 27.15% higher than peers
Average Industry Beta:
0.719
Beta is 7.29% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
17.11%
Sustainable growth rate is 17.03% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.183
Alpha is 12.36% above industry average alpha yield
Alpha is 1167% higher than market/& is unsustainably high
Analysis of Cost of Capital of
UNH
Equity cost of capital:
0.084
Equity cost of capital is 4.45% above industry mean WACC
Unlevered (without debt) cost of capital:
5.83%
Before-tax cost of debt:
3.57%
After-tax cost of debt:
2.82%
Overall debt rating:
Upper medium A grade (third highest grade),CO8<=0.0429,"Medium BBB grade (Fourth highest grade)
Weighted average cost of capital (WACC):
2.82%
WACC is 7.54% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$315.71
Revenue growth rate per share of (3Y):
6.22
Annual revenue growth rate is -59.93% below industry average
EPS:
$18.27
Expected Annual growth rate of EPS (3Y):
7.39%
Expected future EPS growth rate is -28.54% lower than the Healthcare Plans industry
Free cash flow (FCF) per share:
$20.27
Balance sheet equity growth per share: 61.39%
Equity growth rate per share is 363.75% higher than the industry
Debt per share
$43.61
EBITDA per share
$28.72
Valuation Analysis Today of
UNH
P/E Ratio:
26.97
P/E Ratio of Competitors/Peers:
23.81
P/E ratio is 13.28% higher than main peers & is 22.79% higher than the industry
Stock price/value with industry average P/E ratio: $401.34
UNH is 28.66% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $183.69
Present value of the expected future dividends only: $161.39
P/S (Price to Sales ratio):
1.64
Price to sales ratio is 110.45% above the industry mean
P/B (Price to book value ratio):
6.22
Price to free cash flow: 25.47
-
Net income growth rate (3Y):
46.34%
Net income growth rate is -157.49% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 7.81%
Dividend yeild: 1.16%
Previous Dividend: $1.65
Previous adjusted dividend: $1.65
Previous Dividend: $6.00
Expected next dividend best case: $1.80
Expected next dividend worst case: $1.50
Average dividend payment (long-term): $1.33
Average dividend increase/decrease (growth rate) % per period: 4.55%
Expected next dividend payment date: 26/09/2022
Expected next dividend record date: 19/09/2022
-
Previous dividend payment date: 28/06/2022
Previous dividend record date: 20/06/2022
-
Dividend History:
2022-06-16--$1.65
2021-12-03--$1.45
2021-06-18--$1.45
2022-03-11--$1.45
2021-09-10--$1.45
2021-03-12--$1.25
Dividend growth rate is 35.31% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
56.06%
Net debt to equity ratio:
30.25%
Debt to assets ratio:
18.44%
Net debt to assets ratio:
9.95%
Debt-to-asset ratio is -71.43% below industry average
Ability to repay debt:
Interest coverage ratio:
15.84
Interest coverage ratio is 435.85% more than industry average
Looking forward:
Debt growth rate:
5.83%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 2.63%
Analysis of Key Statistics
Correlation of price movement with the market:
0.722
Statistical significance of correlation:
UNH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.624
Stock price is 15.77% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.624
Correlation of price movement with Nasdaq (^IXIC):
0.02
Covariance of price movement with the market:
0.025
Kurtosis
12.868
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.154
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
UNH
Gross Profit Margin Ratio:
93%
Operating Profit Margin Ratio:
8.19%
Operating profit margin is -376.22% lower than the industry
Net Profit Margin Ratio:
93%
Effective Tax Rate:
20.38%
Effective tax rate is 22.46% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
23.98%
Return on equity (ROE) is -380.18% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.89%
Return on assets (ROA) is -304.44% lower than the industry
Financial Leverage:
1.2x
Current Ratio:
0.78
Current ratio is -52.71% below industry average
Cash Conversion Cycle (days):
-22.8
Cash conversion cycle is -108.61% below industry average
The remaining useful life of property plant & equipment is: 7.9 years
Stock based compensation to net income ratio:
1.71%
In-depth Efficiency Analysis
Revenue generated per employee:
843.7K
Each employee generates -44% less revenue than industry average revenue per employee
EBITDA generated per employee:
76.7K
Each employee generates -2% less EBITDA than industry average revenue per employee
Profit generated per employee:
49.9K
Each employee generates 19% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
13.6K
Each employee generates -1% less free cash flow than industry average revenue per employee
Assets/Capital per employee
434.9K
Each employee generates -1% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
UNH
JOHNSON & JOHNSON (XNYS:JNJ)
PFIZER INC. (XNYS:PFE)
ELI LILLY AND COMPANY (XNYS:LLY)
THERMO FISHER SCIENTIFIC INC. (XNYS:TMO)
ABBVIE INC. (XNYS:ABBV)
Novo Nordisk A/S (XNYS:NVO)
DANAHER CORPORATION (XNYS:DHR)
MERCK & CO., INC. (XNYS:MRK)
Novartis Inc. (XNYS:NVS)
Current Analyst Ratings
Strong buy�46%
Buy�46%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
295.31B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
226.48B
68.83B
-
-
-
-
46.89B
46.89B
-
1.70B
3.13B
26.86B
24.18B
17.45B
22.49B
4.58B
17.45B
Statement of Cash Flow
Date:
Period:
788.00M
Differed Income Tax :
161.00M
Stock Based Compensation :
299.00M
Change in Working Capital :
- 1094000.00K
Accounts Receivables:
- 4521000.00K
Other Working Capital:
78.00M
Other Non-Cash Items:
17.00M
Net Cash Provided by Operating Activities:
5.32B
Investments in PP&E:
- 555000.00K
Net Acquisitions:
- 1231000.00K
Purchases of Investments:
- 4982000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
25.48B
2.91B
28.40B
30.87B
-
9.77B
69.03B
9.18B
77.55B
9.92B
42.35B
-
13.21B
152.21B
-
221.24B
53.73B
6.70B
-
2.68B
25.06B
88.17B
40.80B
11.67B
55.42B
-
143.59B
10.00M
78.78B
- 6026000.0K
-
March 31, 2022 at 6:00:00 AM
273.37B
72.77B
216.36B
45.27B
47.49B
22.0B
3.35B
- 255000.00K
- 3673000.00K
- 1100000.00K
551.00M
- 2500000.00K
- 1363000.00K
6.72B
2.30B
157.00M
4.11B
25.48B
21.38B
5.32B
- 555000.00K
4.76B
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
UNH
2023
2024
2025
2026
2027
$588.56
$619.09
$651.19
$684.97
$720.49