UnitedHealth Up 22%, Leads Dow in 2016

Health and Healthcare

Published: July 23, 2016 9:55 am

Last Updated: January 13, 2020 5:23 am

UnitedHealth Group Inc. (NYSE: UNH) shares have risen 22.14% so far in 2016, making it the top performing Dow Jones Industrial Average stock in 2016. The Dow is up 6.58% for the same period to 18,570.84.

One key reason the company has done well is that it has managed the downward pressure Obamacare has put on may insurance firms. It has opted to stay out of markets, as much as possible, that would give it exposure. Its buyout of Optum also has borne fruit quickly.

As for the company’s overall numbers in the most recent quarter and Optum results:

UnitedHealth Group second quarter 2016 revenues grew 28 percent or $10.2 billion year over-year to $46.5 billion. Growth was broad-based, with all businesses driving sequential quarterly revenue increases. Year-over-year, UnitedHealthcare revenues grew 14 percent and Optum revenues grew 52 percent, with revenue growth by business ranging from 18 percent to 69 percent at Optum.

Net earnings for the parent company were $1.81 per share, up 10% from the year before.

Part of the improvement in the quarter was simple customer growth:

UnitedHealthcare grew over the past year to serve over 2.1 million more people in domestic medical benefits markets, including 320,000 more people in the second quarter.

As 24/7 Wall St. pointed out after earnings, investors got more than results for the quarter:

UnitedHealth repurchased $980 million worth of its common stock in the second quarter and raised its annual dividend payment by 26% to $2.50 per share.

As MarketWatch pointed out after the release of UnitedHealth results:

UnitedHealth Group Inc. on Tuesday posted a strong earnings beat as revenue continued to surge in its pharmacy-services business and the biggest U.S. health insurer lifted the low end of its guidance for year.

The Minnetonka, Minn., company now expects adjusted earnings for the year of about $7.80 to $7.95 a share, compared with its previous forecast — raised in April — for $7.75 to $7.95 a share.

A marriage of good results and optimism about the future.

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