UnitedHealth Group (NYSE: UNH) and Anthem (NYSE:ANTM) are both large-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Risk and Volatility
UnitedHealth Group has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, Anthem has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.
UnitedHealth Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.5%. Anthem pays an annual dividend of $2.80 per share and has a dividend yield of 1.5%. UnitedHealth Group pays out 35.1% of its earnings in the form of a dividend. Anthem pays out 26.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. UnitedHealth Group has increased its dividend for 2 consecutive years and Anthem has increased its dividend for 7 consecutive years.
Earnings & Valuation
This table compares UnitedHealth Group and Anthem’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|UnitedHealth Group||$192.60 billion||0.99||$15.57 billion||$8.54||23.21|
|Anthem||$88.03 billion||0.56||$5.75 billion||$10.56||17.67|
UnitedHealth Group has higher revenue and earnings than Anthem. Anthem is trading at a lower price-to-earnings ratio than UnitedHealth Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
86.2% of UnitedHealth Group shares are owned by institutional investors. Comparatively, 87.7% of Anthem shares are owned by institutional investors. 0.9% of UnitedHealth Group shares are owned by company insiders. Comparatively, 0.4% of Anthem shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares UnitedHealth Group and Anthem’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and target prices for UnitedHealth Group and Anthem, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
UnitedHealth Group currently has a consensus target price of $203.20, suggesting a potential upside of 2.53%. Anthem has a consensus target price of $181.31, suggesting a potential downside of 2.83%. Given UnitedHealth Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe UnitedHealth Group is more favorable than Anthem.
UnitedHealth Group beats Anthem on 12 of the 17 factors compared between the two stocks.
About UnitedHealth Group
UnitedHealth Group Incorporated is a health and well-being company. The Company operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. It conducts its operations through two business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum. UnitedHealthcare provides healthcare benefits to an array of customers and markets, and includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global businesses. Optum is a health services business serving the healthcare marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. OptumInsight provides services, technology and healthcare solutions to participants in the healthcare industry. OptumRx provides retail network contracting, purchasing and clinical solutions.
Anthem, Inc. is a health benefits company. The Company operates through three segments: Commercial and Specialty Business, Government Business and Other. It offers a spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; indemnity plans and other hybrid plans, including consumer-driven health plans; and hospital only and limited benefit products. It also provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It provides an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits and radiology benefit management.
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