I Still Believe This Stock is a Triple-Digit Growth Story

UnitedHealth Group (NYSE:UNH) is one of the largest healthcare insurers (and a lot else) in the U.S.

So, it would seem crazy that I talk about this stock as a triple-digit growth story. UNH has a $243 billion market cap and stocks that big, in this sector, usually don’t put up those kinds of numbers.

Well, in the past three years, UNH has. That’s over 33% growth per year in the past three years. And the thing is, this was all during some of the tumultuous times that the healthcare industry has seen.

First, Obamacare (aka the Affordable Care Act) was enacted and big healthcare insurers were trying to figure out how to build policies that would work under the law.

Then when Donald Trump became president and the Republicans took both the House and Senate, Obamacare looked doomed.

And to this day, the GOP is continuing its efforts to eviscerate Obamacare if not kill it.

Remember, with organizations this size, they don’t exactly turn on a dime.

These companies need to have years worth of visibility to be able to execute effectively. But UNH has turned this time of uncertainty into a world of opportunity.

One of its longer-range plans, which continues apace today, is to integrate the healthcare experience. One unavoidable long-term trend is the fact that the U.S. population is graying. The baby boomers are going to start reaching 60 in significant numbers for the next two decades.

That means growing demand for chronic care facilities. So, UNH has built its own division that does just that.

Another issue that will always be in the healthcare space is making this wildly complex industry more efficient. From managing records, to working with employers as well as state, local and federal governments, UNH is a seasoned pro that continues to improve its ability to deliver services and solutions to consumers, industry and companies. Its OptumHealth division has 91 million people in its system.

Another area where UNH has seen into the future is managing prescription medicines. As a healthcare insurer that pays for patients’ medicine, it only makes sense that it get a hand in pharmacy benefits management side of things. Its OptumRx unit already has 65 million subscribers.

You can see how UNH’s Optum divisions are built for growth, regardless of whether Obamacare, or Trumpcare for that matter, rises or falls.

The insurance side of the business is doing just fine.

Q1 numbers tell the story. Earnings for the insurance side were up 12.5% for the quarter. Its Medicare enrollment was up 10.6%. UNH currently has 33% of Medicare enrollments and expects that number to rise to 50% over the next five to 10 years.

Optum earnings were up 29.2% for the quarter, with double-digit growth in each division.

And the icing on the cake, one of the biggest curveballs to keeping the growth going at OptumRx, Amazon.com (NASDAQ:AMZN) entering the prescription drug business, is no longer an issue.

— Louis Navellier

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Source: Investor Place