Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
UNH· Healthcare
UnitedHealth
A health insurance giant earning a thin 4.2% operating margin while the market still asks 29 times earnings.
Buffett fit
Partial fit
Owner
19
Durability
61
Management
62
Price
31
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
As an owner I would ask what I actually pocket, and the answer is troubling.
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The business will endure because scale in claims and the Optum franchise are real, and that supports a durability reading of 61.
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Management earns a 62 here and the share count has edged down about 0.9% a year, so they are returning some cash rather than diluting.
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There is none worth the name. At 29 times earnings the owner-earnings yield is only 4.6% and the plain earnings yield is 3.5%, less than I can get sitting in a Treasury bill with no medical-cost risk attached.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Revenue has compounded at a healthy 11.7% a year, showing the franchise keeps gaining ground at the top line.
- 2 covers reported earnings at 1.33 times, so the reported profits are backed by real cash.
- 3Scale is genuine and underpins a durability score of 61, among the steadier reads in the report.
- 4The share count has fallen about 0.9% a year, so management returns cash rather than diluting owners.
Concerns
7- 1The stock is expensive: 29 times earnings, an owner-earnings yield of just 4.6%, and EV to of 21 leave no .
- 2Earnings per share have shrunk 7.8% a year even as revenue grew, so growth is not reaching the owner.
- 3Earnings have fallen as much as 35% from peak to trough, a brutal swing for a supposedly defensive business.
- 4The is a razor-thin 4.2%, leaving almost no buffer when medical costs surprise to the upside.
Price history
$407-11.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
UnitedHealth collects premiums from members and employers and pays out medical claims, keeping the spread, and through Optum it sells pharmacy benefits, care delivery, and data services. The economics are high volume and low margin, with an of just 4.2% on a of 18.8%. Revenue has compounded at 11.7% a year, but earnings per share have gone backward at minus 7.8%, so the growth has not reached the owner.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Healthcare
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