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In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating UnitedHealth Group (NYSE:UNH) and its primary competitors in the Health Care Providers & Services industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.
UnitedHealth Group is one of the largest private health insurers, providing medical benefits to about 53 million members globally, including 5 million outside the U.S. as of mid-2023. As a leader in employer-sponsored, self-directed, and government-backed insurance plans, UnitedHealth has obtained massive scale in managed care. Along with its insurance assets, UnitedHealth's continued investments in its Optum franchises have created a healthcare services colossus that spans everything from medical and pharmaceutical benefits to providing outpatient care and analytics to both affiliated and third-party customers.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| UnitedHealth Group Inc | 30.29 | 5.27 | 1.22 | -1.61% | $1.84 | $23.0 | 8.56% |
| Centene Corp | 13.66 | 1.37 | 0.24 | 4.41% | $1.96 | $4.64 | 3.9% |
| Molina Healthcare Inc | 16.95 | 4.07 | 0.51 | 6.91% | $0.47 | $1.22 | 21.87% |
| HealthEquity Inc | 94.47 | 3.60 | 7.29 | 1.39% | $0.08 | $0.19 | 17.66% |
| Progyny Inc | 46.08 | 4.68 | 2.56 | 3.0% | $0.02 | $0.06 | 7.62% |
| Average | 42.79 | 3.43 | 2.65 | 3.93% | $0.63 | $1.53 | 12.76% |
Upon analyzing UnitedHealth Group, the following trends can be observed:
The stock's Price to Earnings ratio of 30.29 is lower than the industry average by 0.71x, suggesting potential value in the eyes of market participants.
With a Price to Book ratio of 5.27, which is 1.54x the industry average, UnitedHealth Group might be considered overvalued in terms of its book value, as it is trading at a higher multiple compared to its industry peers.
Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 1.22, which is 0.46x the industry average.
The company has a lower Return on Equity (ROE) of -1.61%, which is 5.54% below the industry average. This indicates potential inefficiency in utilizing equity to generate profits, which could be attributed to various factors.
With higher Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $1.84 Billion, which is 2.92x above the industry average, the company demonstrates stronger profitability and robust cash flow generation.
With higher gross profit of $23.0 Billion, which indicates 15.03x above the industry average, the company demonstrates stronger profitability and higher earnings from its core operations.
With a revenue growth of 8.56%, which is much lower than the industry average of 12.76%, the company is experiencing a notable slowdown in sales expansion.
The debt-to-equity (D/E) ratio is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In light of the Debt-to-Equity ratio, a comparison between UnitedHealth Group and its top 4 peers reveals the following information:
In terms of the debt-to-equity ratio, UnitedHealth Group has a relatively higher level of debt of 0.85 compared to its top 4 peers.
This could be seen as a potential risk factor for the company, as a higher debt burden may increase financial vulnerability.
For UnitedHealth Group in the Health Care Providers & Services industry, the PE ratio is low compared to peers, indicating potential undervaluation. The PB ratio is high, suggesting a premium relative to industry peers. The PS ratio is low, signaling a possible discount compared to competitors. In terms of ROE, UnitedHealth Group shows lower profitability, while EBITDA and gross profit are high, indicating strong operational performance. However, revenue growth is lower compared to industry peers, potentially impacting future prospects.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: UNH
