Will UnitedHealth Group Be a Trillion-Dollar Stock by 2030?

 Will UnitedHealth Group be a trillionaire by 2030?

In the field of investing, market capitalization is a good but not perfect way to measure the success of a business. Sure, sometimes companies are overvalued. But the market value of the company can at least give you an idea of ​​what perceived value the company provides.

Currently, there are only six US companies that can boast of being in the $1 trillion market capitalization club. But as the corporation grows in revenue and profits over time, plenty of other candidates could eventually join that group. With a market value of $468 billion, UnitedHealth Group (NYSE: UNH ) could become one of them. But can he achieve this feat in the next seven years? Let's look at the math needed to pull this off and the basics to figure out the answer.

Here's the math

From its current valuation, UnitedHealth Group needs to grow its non-GAAP (adjusted) diluted earnings per share (EPS) by nearly 114% over the next seven years to get into the four-line club. This would mean a compound annual growth rate of 11.5%. It's also worth noting that this assumes a roughly unchanged valuation multiple.UnitedHealth Group is a pioneer in a massive industrySo we have a baseline of what it will take to add another digit to UnitedHealth Group's valuation. Here's why I think it can be done.

The company serves more than 150 million people each year through its UnitedHealthcare health insurance plans and Optum data and technology businesses. That's a massive core customer base. Given the unmatched size of its customer base, analysts expect UnitedHealth Group to generate total revenue of $367.7 billion in 2023.

With a higher top line than many global economies and all other health insurers, you'd think the law of large numbers would work against the company. But that's still a drop compared to the roughly $2.2 trillion in annual revenue the global health insurance industry is estimated to reach by 2023.

Organic growth through higher medical memberships and price increases for health insurance plans/services is just one lever the company could use to increase revenue and profits. The second is a blitz of acquisitions that could help further expand its already leading market share as the global health insurance market reaches nearly $3 trillion in 2030.

For these reasons, analysts believe that UnitedHealth Group's adjusted diluted earnings per share will grow by 12.8% annually over the next five years. For context, that beats the average annual profit growth projected in the healthcare industry by 11.7%.

UnitedHealth Group's 1.5% dividend yield doesn't seem all that spectacular considering it matches the S&P 500's 1.5% yield. But when savvy investors dig deeper, they'll find that the company's phenomenal dividend growth is what sets it apart. In the last five years alone, the quarterly dividend per share has more than doubled to the current value of $1.88.

UnitedHealth Group also appears to have many years of dividend growth ahead of it. In addition to its double-digit annual adjusted diluted EPS growth potential, the dividend payout ratio is expected to register below 30% in 2023. This payout ratio is conservative enough to leave the company with capital needed for growth projects, debt repayments and further dividend increases.

The award is defensible

The prospect of a spike in elective surgeries stemming from the COVID-19 pandemic has sent UnitedHealth Group shares down 5% so far in 2023. That pushed the stock's forward price-to-earnings (P/E) ratio down to 18.1, which isn't overvalued compared to the health plan industry's average forward P/E ratio of 13.9.

That's what makes UnitedHealth Group interesting for dividend growth investors. And even if the forward P/E ratio declines a bit going forward, the company's growth profile looks high enough to reach a $1 trillion valuation by 2030.When our team of analysts has a stock tip, it can pay to listen. After all, the newsletter they've been running for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and UnitedHealth Group wasn't one of them! That's right - he thinks these 10 stocks are an even better buy.Will UnitedHealth Group be a trillionaire by 2030?

In the field of investing, market capitalization is a good but not perfect way to measure the success of a business. Sure, sometimes companies are overvalued. But the market value of the company can at least give you an idea of ​​what perceived value the company provides.

Currently, there are only six US companies that can boast of being in the $1 trillion market capitalization club. But as the corporation grows in revenue and profits over time, plenty of other candidates could eventually join that group. With a market value of $468 billion, UnitedHealth Group (NYSE: UNH ) could become one of them. But can he achieve this feat in the next seven years? Let's look at the math needed to pull this off and the basics to figure out the answer.

Here's the math

From its current valuation, UnitedHealth Group needs to grow its non-GAAP (adjusted) diluted earnings per share (EPS) by nearly 114% over the next seven years to get into the four-line club. This would mean a compound annual growth rate of 11.5%. It's also worth noting that this assumes a roughly unchanged valuation multiple.UnitedHealth Group is a pioneer in a massive industrySo we have a baseline of what it will take to add another digit to UnitedHealth Group's valuation. Here's why I think it can be done.

The company serves more than 150 million people each year through its UnitedHealthcare health insurance plans and Optum data and technology businesses. That's a massive core customer base. Given the unmatched size of its customer base, analysts expect UnitedHealth Group to generate total revenue of $367.7 billion in 2023.

With a higher top line than many global economies and all other health insurers, you'd think the law of large numbers would work against the company. But that's still a drop compared to the roughly $2.2 trillion in annual revenue the global health insurance industry is estimated to reach by 2023.

Organic growth through higher medical memberships and price increases for health insurance plans/services is just one lever the company could use to increase revenue and profits. The second is a blitz of acquisitions that could help further expand its already leading market share as the global health insurance market reaches nearly $3 trillion in 2030.

For these reasons, analysts believe that UnitedHealth Group's adjusted diluted earnings per share will grow by 12.8% annually over the next five years. For context, that beats the average annual profit growth projected in the healthcare industry by 11.7%.

UnitedHealth Group's 1.5% dividend yield doesn't seem all that spectacular considering it matches the S&P 500's 1.5% yield. But when savvy investors dig deeper, they'll find that the company's phenomenal dividend growth is what sets it apart. In the last five years alone, the quarterly dividend per share has more than doubled to the current value of $1.88.

UnitedHealth Group also appears to have many years of dividend growth ahead of it. In addition to its double-digit annual adjusted diluted EPS growth potential, the dividend payout ratio is expected to register below 30% in 2023. This payout ratio is conservative enough to leave the company with capital needed for growth projects, debt repayments and further dividend increases.

The award is defensible

The prospect of a spike in elective surgeries stemming from the COVID-19 pandemic has sent UnitedHealth Group shares down 5% so far in 2023. That pushed the stock's forward price-to-earnings (P/E) ratio down to 18.1, which isn't overvalued compared to the health plan industry's average forward P/E ratio of 13.9.

That's what makes UnitedHealth Group interesting for dividend growth investors. And even if the forward P/E ratio declines a bit going forward, the company's growth profile looks high enough to reach a $1 trillion valuation by 2030.When our team of analysts has a stock tip, it can pay to listen. After all, the newsletter they've been running for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and UnitedHealth Group wasn't one of them! That's right - he thinks these 10 stocks are an even better buy.Will UnitedHealth Group be a trillionaire by 2030?

In the field of investing, market capitalization is a good but not perfect way to measure the success of a business. Sure, sometimes companies are overvalued. But the market value of the company can at least give you an idea of ​​what perceived value the company provides.

Currently, there are only six US companies that can boast of being in the $1 trillion market capitalization club. But as the corporation grows in revenue and profits over time, plenty of other candidates could eventually join that group. With a market value of $468 billion, UnitedHealth Group (NYSE: UNH ) could become one of them. But can he achieve this feat in the next seven years? Let's look at the math needed to pull this off and the basics to figure out the answer.

From its current valuation, UnitedHealth Group needs to grow its non-GAAP (adjusted) diluted earnings per share (EPS) by nearly 114% over the next seven years to get into the four-line club. This would mean a compound annual growth rate of 11.5%. It's also worth noting that this assumes a roughly unchanged valuation multiple.UnitedHealth Group is a pioneer in a massive industrySo we have a baseline of what it will take to add another digit to UnitedHealth Group's valuation. Here's why I think it can be done.

The company serves more than 150 million people each year through its UnitedHealthcare health insurance plans and Optum data and technology businesses. That's a massive core customer base. Given the unmatched size of its customer base, analysts expect UnitedHealth Group to generate total revenue of $367.7 billion in 2023.

With a higher top line than many global economies and all other health insurers, you'd think the law of large numbers would work against the company. But that's still a drop compared to the roughly $2.2 trillion in annual revenue the global health insurance industry is estimated to reach by 2023.

Organic growth through higher medical memberships and price increases for health insurance plans/services is just one lever the company could use to increase revenue and profits. The second is a blitz of acquisitions that could help further expand its already leading market share as the global health insurance market reaches nearly $3 trillion in 2030.

For these reasons, analysts believe that UnitedHealth Group's adjusted diluted earnings per share will grow by 12.8% annually over the next five years. For context, that beats the average annual profit growth projected in the healthcare industry by 11.7%.

UnitedHealth Group's 1.5% dividend yield doesn't seem all that spectacular considering it matches the S&P 500's 1.5% yield. But when savvy investors dig deeper, they'll find that the company's phenomenal dividend growth is what sets it apart. In the last five years alone, the quarterly dividend per share has more than doubled to the current value of $1.88.

UnitedHealth Group also appears to have many years of dividend growth ahead of it. In addition to its double-digit annual adjusted diluted EPS growth potential, the dividend payout ratio is expected to register below 30% in 2023. This payout ratio is conservative enough to leave the company with capital needed for growth projects, debt repayments and further dividend increases.

The award is defensible

The prospect of a spike in elective surgeries stemming from the COVID-19 pandemic has sent UnitedHealth Group shares down 5% so far in 2023. That pushed the stock's forward price-to-earnings (P/E) ratio down to 18.1, which isn't overvalued compared to the health plan industry's average forward P/E ratio of 13.9.

That's what makes UnitedHealth Group interesting for dividend growth investors. And even if the forward P/E ratio declines a bit going forward, the company's growth profile looks high enough to reach a $1 trillion valuation by 2030.When our team of analysts has a stock tip, it can pay to listen. After all, the newsletter they've been running for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and UnitedHealth Group wasn't one of them! That's right - he thinks these 10 stocks are an even better buy.Will UnitedHealth Group be a trillionaire by 2030?

In the field of investing, market capitalization is a good but not perfect way to measure the success of a business. Sure, sometimes companies are overvalued. But the market value of the company can at least give you an idea of ​​what perceived value the company provides.

Currently, there are only six US companies that can boast of being in the $1 trillion market capitalization club. But as the corporation grows in revenue and profits over time, plenty of other candidates could eventually join that group. With a market value of $468 billion, UnitedHealth Group (NYSE: UNH ) could become one of them. But can he achieve this feat in the next seven years? Let's look at the math needed to pull this off and the basics to figure out the answer.

From its current valuation, UnitedHealth Group needs to grow its non-GAAP (adjusted) diluted earnings per share (EPS) by nearly 114% over the next seven years to get into the four-line club. This would mean a compound annual growth rate of 11.5%. It's also worth noting that this assumes a roughly unchanged valuation multiple.

UnitedHealth Group is a pioneer in a massive industry

So we have a baseline of what it will take to add another digit to UnitedHealth Group's valuation. Here's why I think it can be done.The company serves more than 150 million people each year through its UnitedHealthcare health insurance plans and Optum data and technology businesses. That's a massive core customer base. Given the unmatched size of its customer base, analysts expect UnitedHealth Group to generate total revenue of $367.7 billion in 2023.

With a higher top line than many global economies and all other health insurers, you'd think the law of large numbers would work against the company. But that's still a drop compared to the roughly $2.2 trillion in annual revenue the global health insurance industry is estimated to reach by 2023.

Organic growth through higher medical memberships and price increases for health insurance plans/services is just one lever the company could use to increase revenue and profits. The second is a blitz of acquisitions that could help further expand its already leading market share as the global health insurance market reaches nearly $3 trillion in 2030.

For these reasons, analysts believe that UnitedHealth Group's adjusted diluted earnings per share will grow by 12.8% annually over the next five years. For context, that beats the average annual profit growth projected in the healthcare industry by 11.7%.

UnitedHealth Group's 1.5% dividend yield doesn't seem all that spectacular considering it matches the S&P 500's 1.5% yield. But when savvy investors dig deeper, they'll find that the company's phenomenal dividend growth is what sets it apart. In the last five years alone, the quarterly dividend per share has more than doubled to the current value of $1.88.

UnitedHealth Group also appears to have many years of dividend growth ahead of it. In addition to its double-digit annual adjusted diluted EPS growth potential, the dividend payout ratio is expected to register below 30% in 2023. This payout ratio is conservative enough to leave the company with capital needed for growth projects, debt repayments and further dividend increases.

The award is defensible

The prospect of a spike in elective surgeries stemming from the COVID-19 pandemic has sent UnitedHealth Group shares down 5% so far in 2023. That pushed the stock's forward price-to-earnings (P/E) ratio down to 18.1, which isn't overvalued compared to the health plan industry's average forward P/E ratio of 13.9.That's what makes UnitedHealth Group interesting for dividend growth investors. And even if the forward P/E ratio declines a bit going forward, the company's growth profile looks high enough to reach a $1 trillion valuation by 2030.

When our team of analysts has a stock tip, it can pay to listen. After all, the newsletter they've been running for over a decade, the Motley Fool Stock Advisor, has tripled the market.*They just revealed what they believe are the ten best stocks for investors to buy right now... and UnitedHealth Group wasn't one of them! That's right - he thinks these 10 stocks are an even better buy.