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Key Factors

  • UnitedHealth Group inventory is down regardless of the corporate’s double beat in its fourth-quarter earnings.  
  • An increase in medical bills could also be obscuring the rise in income from the corporate’s Optum division, which makes use of AI to assist enhance income accuracy and effectivity at present and later affected person care. 
  • UNH inventory is approaching a key transferring common that has been a dependable shopping for sign in the previous couple of months. 
  • 5 shares we like higher than UnitedHealth Group

The large banks will get the headlines, however traders ought to watch UnitedHealth Group Inc. NYSE: UNH. The medical insurance big scored a double beat when it reported fourth-quarter earnings on January 12, 2024. The headline numbers are as follows: Earnings per share got here in at $6.16, beating analysts’ expectations of $5.99. Income of $94.43 beat expectations of $92.18. 

Nevertheless, UNH inventory dropped 3.4% in early buying and selling as traders have been involved in regards to the firm’s sharp year-over-year rise in medical bills. A lot of this stems from the corporate’s Medicare Benefit enterprise. An increase in medical bills is a drag on income. That is the explanation why UNH inventory fell after earnings.  

With that stated, there are technical the reason why UNH inventory could also be buyable on this current dip. However there’s another excuse it’s possible you’ll wish to take into account. 

The rise of AI in healthcare 

One of many highlights of the earnings report got here from the corporate’s Optum division. Quarterly income was $59.5 billion, a 24.2% improve. That helped to offset among the rise in medical bills. 

Optum is comprised of a gaggle of docs who present care by way of native medical teams and contract with most main medical insurance plans. This consists of pharmacy providers in addition to telehealth. Nevertheless, a key focus of Optum is the usage of expertise and data-enabled care supply.  

If that feels like synthetic intelligence (AI), you are proper. Optum has its personal division, Optum360™, which has been utilizing AI since 2018. The concept is to maneuver from preventative medication to predictive medication. Using AI in care supply, nonetheless, remains to be in its early phases. 

Nonetheless, the corporate makes use of pure language processing (NLP) to enhance income accuracy and effectivity by serving to with duties resembling discovering that means in medical data, revealing vital documentation points to clinicians, and lowering useful resource constraints. 

A protected, rising dividend 

The UNH inventory worth has jumped over 108% up to now 5 years. That is roughly a mean annual achieve of 20%, making UnitedHealth Group one of many prime medical shares. It additionally qualifies UnitedHealth as a progress inventory. Nevertheless, traders should not overlook the corporate’s dividend. 

The yield of 1.44% is not significantly spectacular. However, the corporate has elevated its dividend in every of the final 14 years. Within the final three years, that dividend has grown by over 14% yearly. And with a 32% payout ratio, future dividend progress is a close to certainty. At present, the entire annual payout per share is $7.52 

UNH inventory approaches the purchase zone 

UNH inventory is buying and selling inside a reasonably outlined vary. Twice within the final 45 days, the inventory has confronted resistance at its 52-week excessive of round $550. Nevertheless, earlier than earnings, the inventory was buying and selling round $520. This has been a shopping for sign for traders on two separate events within the final three months. 

In fact, previous efficiency is not all the time a helpful predictor. However technical evaluation means that with the UNH inventory drifting in the direction of its 100-day easy transferring common at $521.60, the inventory may very well be a purchase.  

MarketBeat retains observe of Wall Road’s top-rated and finest performing analysis analysts and the shares they advocate to their purchasers every day. MarketBeat has recognized the that prime analysts are quietly whispering to their purchasers to purchase now earlier than the broader market catches on… and UnitedHealth Group wasn’t on the checklist.

Whereas UnitedHealth Group at present has a “Average Purchase” score amongst analysts, top-rated analysts imagine these 5 shares are higher buys.

View The 5 Shares Right here

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