Here's Why You Should Retain UnitedHealth Group (UNH) Stock

Core Viewpoint - UnitedHealth Group is benefiting from an expanding premium base, contract wins, strength in the Optum business, and a solid financial position, with an optimistic earnings outlook for 2024 reinforcing investor confidence in the stock [1] Financial Performance - UnitedHealth Group currently has a Zacks Rank of 3 (Hold) and has gained 9.2% over the past year, slightly outperforming the industry growth of 9.1% [2] - The Zacks Consensus Estimate for 2024 earnings is $27.60 per share, reflecting a 9.9% increase from the previous year, with revenues expected to reach $398.1 billion, indicating a 7.1% growth [4] - The consensus estimate for 2025 earnings is $30.98 per share, suggesting a 12.3% growth from 2024, with revenues projected at $426.5 billion, also a 7.1% increase [4] - UnitedHealth Group has a return on equity of 26.5%, surpassing the industry average of 23.8%, demonstrating efficient use of shareholders' funds [6] Business Growth Drivers - The company is experiencing revenue growth due to strong contributions from its UnitedHealthcare and Optum businesses, with effective Medicare and Medicaid plans expanding the membership base and increasing premiums [8] - The Optum unit is leveraging acquisitions and advanced technology, with plans to serve an additional 750,000 patients in value-based arrangements in 2024 [9] - UnitedHealth Group's solid financial position allows for strategic investments, including share buybacks and dividends, with a dividend yield of 1.4%, higher than the industry average of 1.3% [10] Earnings Surprise and Outlook - UnitedHealth Group has a strong earnings surprise history, exceeding estimates in the last four quarters with an average surprise of 3.65% [5] - Adjusted net earnings per share for 2024 are forecasted to be between $27.50 and $28.00, indicating a 10.5% improvement from 2023 [7]