UnitedHealth Group has the potential to reach a market value of $1 trillion by 2030, according to an Aug. 10 financial report from the Motley Fool.
UnitedHealth Group currently has a market value of $468 billion and would only be the seventh company to reach a $1 trillion valuation.
Six key takeaways:
1. UnitedHealth would need to increase non-GAAP diluted earnings per share by about 114 percent over the next seven years, or an 11.5 percent compound annual growth rate, to reach a $1 trillion market valuation by 2030.
2. The company's adjusted diluted earnings per share could increase 12.8 percent annually over the next five years, according to analysts.
3. UnitedHealthcare is the world's largest health insurer by net premiums, and Optum's care delivery arm has served more than 103 million consumers. UnitedHealth Group is expecting between $357 billion and $360 billion in revenue by the end of 2023.
4. The company will continue to increase revenue and profits by growing membership at UnitedHealthcare and through mergers and acquisitions.
5. UnitedHealth Group's stock has a 1.5 percent dividend yield, but quarterly dividend per share has more than doubled to $1.88 over the last five years. The dividend payout ratio could be below 30 percent this year.
6. UnitedHealth Group shares have decreased 5 percent this year and the stock's price-to-earnings ratio is 18.1, compared to the health insurance industry average ratio of 13.9.