5-Star Stocks Poised to Pop: UnitedHealth

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, managed care provider UnitedHealth Group (NYS: UNH) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at UnitedHealth's business and see what CAPS investors are saying about the stock right now.

UnitedHealth facts

Headquarters (Founded)Minnetonka, Minn. (1974)
Market Cap$48.3 billion
IndustryManaged health care
Trailing-12-Month Revenue$98.36 billion
ManagementCEO Stephen Hemsley (since December 2006)
CFO David Wichmann (since January 2011)
Return on Equity (Average, Past 3 Years)18.1%
Cash/Debt$12.3 billion / $11.2 billion
Dividend Yield1.4%
CompetitorsCoventry Health Care (NYS: CVH)
Humana (NYS: HUM)
WellPoint (NYS: WLP)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 3,488 members who have rated UnitedHealth believe the stock will outperform the S&P 500 going forward. These bulls include tiomiguel and rymico.

Just last month, tiomiguel touched on UnitedHealth's healthy fundamentals: "Good recent ROE; low debt; excellent free cash flow; steady sales/EPS growth over 1-, 3-, and 5-year periods; low P/S, P/B, and P/E; huge network of health-care providers; few competitors on its scale."

In fact, UnitedHealth boasts a solid three-year average operating margin of 8%. That's slightly higher than that of competitors like Coventry (5.7%), Humana (5.5%), and WellPoint (7.3%).

CAPS member rymico expands on the UnitedHealth outperform argument:

No reason for this company's recent strength to fade. UNH recently reported lower utilization, which should continue to overhang hospitals and bode well for HMO's. Most of the managed care firms ... should see the same solid results and stocks from this industry are expected to continue to climb higher.

What do you think about UnitedHealth, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track UnitedHealth?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of and creating a diagonal call position in UnitedHealth, as well as buying shares of Coventry. The Motley Fool owns shares of UnitedHealth. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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