Shares of UnitedHealth Group (NYSE:UNH) popped in October after the company released its latest earnings results. The stock surged 18% last month, outperforming the S&P 500 which rose by a more modest 7%.
For the third quarter ending Sept. 30, UnitedHealth's revenue of $72.3 billion rose 11% year over year. Its net earnings of $4.2 billion also improved by 29% from the $3.3 billion the company reported during the same period a year ago. On a per-share basis, adjusted earnings of $4.52 beat analyst expectations of $4.41 by 2.5% in yet another solid showing for the company. UnitedHealth credits a growth in members along with less of a negative impact from COVID-19 as key reasons for the company's stronger overall performance this past quarter.
Year to date, the stock is now up more than 31% and trading at a price-to-earnings multiple of more than 28. Although that's a bit high for value-oriented investors, it's on par with the average holding in the Health Care Select Sector SPDR Fund (NYSE Arca: XLV) which trades at a multiple of 27.
UnitedHealth is a fairly consistent stock to hold, posting a profit margin of at least 5% or better in each of the past four years. Trading at a beta of around 0.8, the healthcare stock is normally a more stable buy than the markets as a whole.
And with a dividend yield of around 1.3%, investors can get a good mix of stable growth along with a decent dividend that they can count on for the long haul. If you're looking for a good investment to hold in your portfolio, it's hard to go wrong with industry giant UnitedHealth.
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