UnitedHealth Group

Methodology

UnitedHealth Group's fair value calculation works well given the company's consistent earnings growth driven by membership expansion across commercial, Medicare Advantage, and Medicaid segments plus Optum's healthcare services growth. The method captures UnitedHealth's position as a diversified healthcare leader with predictable cash flows, though investors should normalize for occasional medical cost ratio fluctuations. Fair value estimates are reliable because the integrated model combining insurance and care delivery provides earnings stability and multiple growth vectors.

Methodology

UnitedHealth typically commands moderate PEG ratios reflecting its consistent growth profile and defensive healthcare exposure, with earnings driven by aging demographics and steady healthcare utilization trends. The PEG framework works well for UnitedHealth because growth rates are predictable and supported by both organic membership gains and Optum's expansion in value-based care. Comparing UnitedHealth's PEG to other managed care companies highlights the premium investors place on its diversified business model and execution consistency.

Methodology

UnitedHealth pays a modest but growing dividend, so PEGY adds incremental value by incorporating the company's steady cash returns alongside consistent double-digit earnings growth. However, the primary investment thesis centers on earnings compounding and market share gains rather than income generation. For total-return investors, PEGY captures both UnitedHealth's reliable growth trajectory and its commitment to returning cash through dividends while reinvesting heavily in technology and care delivery infrastructure.