Long-Term Stock Portfolio: Best Stocks for 10 Years

6. UnitedHealth Group Inc. (NYSE:UNH)

10-Year Revenue CAGR: 11.88%

Number of Hedge Fund Holders: 112

UnitedHealth Group Inc. (NYSE:UNH) is a global healthcare company that offers health insurance plans through its UnitedHealthcare segment, and healthcare services through its OptumHealth segment. UnitedHealthcare provides health plans for individuals, employers, and government programs. OptumHealth offers health services like pharmacy care services, health information and technology, care delivery, care management, and population health management.

Its key growth driver is its strategic transition to value-based care, a healthcare delivery model that prioritizes improving patient outcomes and reducing costs by incentivizing quality over quantity. This is demonstrated by the company’s significant investments in OptumHealth. In 2023, OptumHealth revenues grew by over $2 billion, reaching ~$26 billion, driven by an increase in the number and type of care services offered and the patients served.

Patients served by OptumHealth’s value-based care models have shown improvements in key health metrics. For example, they are more likely to receive cancer screenings, have better control of chronic conditions like diabetes and hypertension, and are 10% less likely to experience emergency room visits or be readmitted to the hospital compared to patients in traditional fee-for-service models. UnitedHealth Group Inc.’s (NYSE:UNH) is well-positioned to capitalize on the evolving healthcare landscape and continue to deliver strong financial performance.

Parnassus Value Equity Fund finds an attractive investment opportunity in UnitedHealth Group Incorporated (NYSE:UNH), a high-quality company with strong long-term growth prospects trading at a discounted valuation. Here’s what the firm stated in its Q3 2024 investor letter:

“We purchased two new stocks, UnitedHealth Group Incorporated (NYSE:UNH) and Amazon. These are high-quality businesses facing temporary issues, which allowed us to purchase them at discounted valuations. The addition of UnitedHealth increases our small overweight to the Health Care sector. UnitedHealth benefits from secular tailwinds of an aging population, health care cost inflation and increasingly relevant use of heath care data/analytics. It also commands industry leadership when it comes to its extensive assets, vertical integration and deep management bench. Even though the stock has underperformed in the past year, we believe many of those factors have been priced in, positioning it well for growth in the near term.”