This week's US Stock (15th Dec. 2025)
UnitedHealth Group (UNH) multiple times to Korean clients as a core defensive holding, especially during volatile periods like late 2025 when the stock faced significant pressure from elevated medical costs and regulatory scrutiny.
Here are the key reasons why UNH stands out as a compelling pick for Korean investors seeking stability and long-term growth amid KRW weakness and outbound flows:
- Dominant Position in a Recession-Resistant Sector UNH is the largest U.S. health insurer, serving over 100 million members through UnitedHealthcare and its Optum platform (pharmacy benefits, data analytics, and care delivery). Healthcare demand remains steady regardless of economic cycles—driven by inexorable aging demographics (similar to Korea's silver wave). This provides essential diversification from tech-heavy portfolios overloaded with names like NVIDIA.
- Attractive Valuation After 2025 Headwinds As of mid-December 2025, UNH trades around $330-340 (down sharply from 2024 peaks near $600 due to higher medical loss ratios ~90% and cost pressures). Forward P/E is in the high teens, well below historical averages and the S&P 500's ~23x. Analysts' consensus is "Buy" with average price targets ~$400-408 (20-25% upside), reflecting expectations of margin recovery and earnings growth resuming in 2026.
- Strong Fundamentals and Growth Drivers
- Q3 2025 results (latest reported): Revenue $113B (+12% YoY), adjusted EPS $2.92 (beat estimates).
- Optum's integrated model aligns incentives to control costs long-term, with investments in tech and value-based care positioning for sustained mid-teens EPS growth post-2025 challenges.
- Dividend yield ~2.6% (recent $2.21 quarterly, payable Dec 16, 2025) plus potential buybacks offer reliable income and shareholder returns.
- Defensive Profile for Korean Allocators Low beta (~0.8) and inflation-hedging qualities suit risk-averse profiles amid won depreciation. It's underrepresented in Korean U.S. holdings compared to mega-tech, offering "under-the-radar" re-rating potential as sector rotation favors healthcare defensives into 2026 (full-year 2025 results and 2026 guidance due Jan 27).
- Path to Recovery Management has addressed 2025's turbulence (higher utilization, cyber issues earlier in the year) with raised guidance mid-year and a focus on core profitability. Analysts see the worst behind, with demographic tailwinds and scale providing a wide moat.
Risks include ongoing regulatory probes (e.g., Medicare practices) and potential policy changes, but UNH's scale often turns these into manageable hurdles.
For Korean investors, UNH is classic steady compounding—allocate 5-8% and hold through volatility for 2026+ upside. If you prefer pure-play hospitals like HCA or energy, let me know your preferences!