We recently compiled a list of 10 Safe Stocks To Invest In For The Long Term in 2024. In this article, we will look at where UnitedHealth Group Incorporated (NYSE:UNH) ranks among 10 Safe Stocks To Invest In For The Long Term in 2024.
The Sectors with Promising Growth
The recent market action can be attributed to the Fed’s decision. To discuss the future of the equity market, Drew Pettit, Citi US equity strategist, appeared in an interview on Yahoo Finance on September 26, 2024.
According to Pettit, the market is yet to hit an all-time high if you look beneath the surface. He suggests that the Fed’s decision and if the potential softness in the labor data comes through, investors may regain confidence positioning the market for recovery. He adds that in the past quarter, cyclical and secular stocks have been performing well, but are yet to hit the market peak.
Speaking of growth sectors, some sectors have outperformed others, growing exponentially. Pettit adds that stocks with mature business models have yielded greater returns from minuscule upsides in sales. As for the tech sector, he believes that stocks will remain resilient and will be able to handle some deceleration. He advises investors to remain cautious of tech stocks moving forward and focus on overlooked areas of the market such as consumer goods, financials, and cyclicals.
Investors Must Focus More on Fundamentals
The market saw a great run-up after the easing cycle. However, the question of a soft landing still stands. On September 30, Liz Young Thomas, SoFi head of investment strategy, appeared in an interview on CNBC to discuss the latest market trends and opportunities for investors.
Thomas believes that the maximum gains have already been achieved up until the easing cycle, however, growth may continue till the end of 2024. She stresses that the next 30 to 60 days are extremely crucial for the market and will help investors understand the motive behind the rate cuts, and whether the cuts were needed in the first place.
While growth in the tech sector has been slowing down, other sectors have reportedly grown and more than 80% of the S&P 500 has been trading above the 200-day moving average. She adds that the tech sector has started to strengthen and the optimism surrounding the Chinese economy may combine to yield positive results for the market.
Thomas reiterates that while multiples are rich, to ensure a soft landing, the market must move to trade based on fundamentals rather than on multiples. She explains that this simply means that multiples are unlikely to expand from here, but earnings may get more steady. Sectors such as industrials have been growing and expanding while financials have been slower. Thomas advises investors to focus on stocks that have strong fundamentals and steady earnings growth.
Our Methodology
To come up with the safest stocks to invest in for the long term in 2024 we consulted multiple reports and also screened for reliable growers using the Finviz stock screener. We compiled an initial list of 30 stocks. We then referred to the 10% year revenue growth rate for each of the stocks along with their history of dividend payouts. Companies with the highest growth rates and a history of dividend growth were included in the list. The 10 safe stocks to invest in for the long term in 2024 are in ascending order of their 10-year revenue growth rate.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
UnitedHealth Group Incorporated (NYSE:UNH)
10 Year Revenue Growth: 11.83%
Number of Hedge Fund Holders: 114
UnitedHealth Group Incorporated (NYSE:UNH) ranks second on our list of safe stocks to invest in for the long term in 2024. It is a multinational health insurance and services company based in the United States. UnitedHealth Group Incorporated (NYSE:UNH) operates several subsidiaries including UnitedHealthcare Servic LLC, Optum, Change Healthcare, and United Health Foundation.
UnitedHealth Group’s (NYSE:UNH) primary goal is giving back to the community. In the past year, UnitedHealth’s professionals made over 2 million home visits to identify health emergencies in patients that would have gone unrecognized otherwise.
On the financial front, UnitedHealth Group Incorporated (NYSE:UNH) logged $98.9 billion in revenue, up by nearly $6 billion. The company is notorious for expansion. In the past 30 days, the company announced plans worth thousands surrounding the provision of integrated healthcare services and healthcare workforce expansion in Idaho and Mexico, to name a few. In addition to that, the company announced its 2025 medicare advantage plan last week. According to the plan, the company will be striving to reduce the cost of healthcare for patients with chronic diseases.
In less than a decade, UnitedHealth Group Incorporated (NYSE:UNH) has grown its revenue from $101 billion in 2011 to $372 billion in 2023. The company currently provides health coverage to over 50 million people in the United States, a testament to its position in the industry and the value it provides to the world.
Analysts are bullish on UNH and their 12-month median price target of $620 points to a 5% upside from current levels. Overall, 114 investors were bullish on the stock at the end of Q2 2024, with total stakes amounting to $12.5 billion. As of June 30, Fisher Asset Management was the largest shareholder with a position worth $1.57 billion.
Invesco Distributors, Inc. stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”
Overall UNH ranks 2nd on our list of safe stocks to invest in for the long term in 2024. While we acknowledge the potential of UNH, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published on Insider Monkey.