Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 18.3%. Since the same quarter one year prior, revenues rose by 11.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- UNITEDHEALTH GROUP INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITEDHEALTH GROUP INC increased its bottom line by earning $5.28 versus $4.72 in the prior year. This year, the market expects an improvement in earnings ($5.50 versus $5.28).
- The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that UNH's debt-to-equity ratio is low, the quick ratio, which is currently 0.63, displays a potential problem in covering short-term cash needs.
- Net operating cash flow has significantly increased by 505.30% to $1,682.00 million when compared to the same quarter last year. Despite an increase in cash flow of 505.30%, UNITEDHEALTH GROUP INC is still growing at a significantly lower rate than the industry average of 1036.17%.
UnitedHealth Group Incorporated operates as a diversified health and well-being company in the United States. UnitedHealth Group has a market cap of $56.23 billion and is part of the health care sector and health services industry. The company has a P/E ratio of 10.4, below the S&P 500 P/E ratio of 17.7. Shares are up 2.6% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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