UnitedHealth Group (NYSE:UNH) is the largest healthcare company in the world by total revenue. Its stock has climbed 36% month-over-month as of close on April 20. Shares have increased 29% year over year.
The COVID-19 outbreak has put the spotlight on healthcare systems all over the world. In the United States, which now leads the world in COVID-19 cases and deaths, talk of reform has grown louder over the years. The loss of Democratic nominee Bernie Sanders to Joe Biden, considered the establishment consensus candidate, seemed to put a lid on the prospect of Medicare-for-All.
This company released its first quarter 2020 results on April 15. Its first quarter 2020 revenues rose 6.8% year-over-year to $64.4 billion. Earnings from operations increased 3.4% to $5 billion. The costs of the COVID-19 pandemic were offset by “lower elective care demand”. This has been one of the knock-on effects of the focus on COVID-19. Fewer people have sought out non-essential medical treatment in recent months.
However, the company has said that it will experience a significant decline in commercial membership in 2020. Over 20 million have already lost employment in the United States, which will lead to large losses in coverage. Meanwhile, UnitedHealth’s Medicare Advantage program saw an uptick in membership in the year-over-year period.
UnitedHealth stock last possessed a favourable price-to-earnings ratio of 19 and a high price-to-book value of 4.4. It has posted strong earnings in the face of a crisis, and investors should expect solid growth over the course of this decade.
