1. UnitedHealth Group Inc (NYSE:UNH)
Billionaire Paul Tudor Jones Q1’2024 Stake: $67,706,126
UnitedHealth Group Inc (NYSE:UNH) is one of the most famous dividend stocks in the market right now, as the health insurance giant has increased its payout every year since 1990. Billionaire Paul Tudor Jones increased his hold in Unitedhealth Group Inc (NYSE:UNH) by 167% in the March quarter, ending the period with a $68 million stake in Unitedhealth Group Inc (NYSE:UNH). Analysts expect Unitedhealth Group Inc’s (NYSE:UNH) EPS to expand by about 10.5% to $27.75 by the end of 2024. The global health insurance industry is set to grow at a CAGR of 6.2% from 2024 through 2032. This growth would bode well for industry leaders like UNH.
Last month Bank of America Securities analyst Kevin Fischbeck reiterated a Buy rating on UnitedHealth Group Incorporated (NYSE:UNH) with a price target of $675.00. The analyst highlighted UnitedHealth’s efforts to grow its long-term EPS to 13-16%, strong value-based care model, and adaptable business strategy.
UnitedHealth revenue in the first quarter increased by 8.6% year-over-year to $99.8 billion. Its net loss per share of $1.53 was due to the $7.1 billion charge from the sale of its Brazil operations. In 2025, the company’s adjusted EPS is expected to jump 12.3% and by 13.2% in 2026.The company’s forward P/E of 17 is still lower than its 10-year average P/E of 20.2.
Baron Health Care Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its first quarter 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is a leading health insurance company that operates across four segments: United Healthcare, Optum Health, OptumInsight, and OptumRX. Shares fell alongside other managed care organizations (MCOs) due to patient utilization of Medicare Advantage (MA) that was higher than consensus forecasts, raising concerns that MCOs had mispriced 2024 bids and could suffer margin compression as a result. In addition, the industry is facing headwinds from MA reimbursement cuts and Star Rating changes. While management said higher cost trends are mostly transitory and reflected in its bidding, and 2024 guidance was roughly in line with consensus, investors took a more cautious wait-and-see approach. We believe UnitedHealth should remain a core portfolio holding, as it is a way to play positive demographic, population health, and value-based reimbursement trends. Despite its size, we think the company should be able to grow earnings consistent with its 13% to 16% long-term EPS annual target, the fastest among major MCOs.”
While we acknowledge the potential of UnitedHealth Group Inc (NYSE:UNH) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the 12 Best Up and Coming Stocks To Buy According to Hedge Funds and the 11 Best AI Penny Stocks to Invest in Now.
