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Without a doubt, UnitedHealth Group (UNH) is the most underrated stock on the market. Not only does it grow, but it grows consistently. The company just posted its 23rd straight quarter of earnings growth over 30%. That's amazing. I’ll be impressed with Google once it can say the same.

UnitedHealth’s stock is up 17% this year, and that’s after coming off a great last year when it soared over 50%. The shares were up another 39% in 2003. In fact, the stock almost never goes down. For this entire decade, UNH has gained over 670%. Not bad, considering the bear market.

The company went public in October 1984. It closed its first day of trading at $4-5/8. Adjusted for five 2-for-1 splits, those shares are now worth about $1,700. Owning the stock is like buying a bond with a 20% coupon.

Despite these great results, many investors overlook UnitedHealth. I guess it’s not as exciting as Google or Amazon, but I’m worried about UnitedHealth’s future. The company just snagged PacifiCare Health Systems for a cool $8 billion, and it raised guidance for the rest of this year. UNH now expects to earn $2.45 to $2.47 a share this year. That still gives the stock a reasonable P/E ratio. This is a stock to buy and hold for the long-term.

Posted by edelfenbein at July 28, 2005 2:27 PM