The job report for September showed that non-farm payrolls increased by 263,000 for the month. The unemployment rate fell to 3.5%, despite harsh efforts by the Federal Reserve to slow the economy.
Analysts are concerned that the Fed's measures would eventually tip the economy into a recession. Also, the International Monetary Fund's managing director, Kristalina Georgieva, announced on Thursday that the IMF is once again cutting its global economic growth estimates for 2023 and expecting a $4 trillion reduction through 2026.
Given these rising uncertainties, investing in fundamentally sound stocks UnitedHealth Group Incorporated (UNH) and Biogen Inc. (BIIB) could be wise. Their solid growth attributes and consistent track record of shareholder returns make them ideal picks now.
UnitedHealth Group Incorporated (UNH)
UNH operates as a diversified healthcare company in the United States. It operates through four segments: UnitedHealthcare; Optum Health; Optum Insight; and Optum Rx.
Last month, UnitedHealthcare, a division of UNH, and Peloton Interactive, Inc. (PTON) renewed and expanded their partnership to assist more individuals in beginning or staying active and enhancing their overall well-being.
Under the newly expanded arrangement, up to 10 million UnitedHealthcare commercial members may be eligible for a yearlong subscription to the Peloton App Membership – or a three-month waiver toward a Peloton All-Access Membership – as part of their health benefits.
Also, last month, Walmart Inc. (WMT) and UNH announced the start of an initial 10-year partnership. The extensive partnership would combine the expertise of both businesses in providing millions of people with high-quality, reasonably priced health services that enhance patient outcomes.
During the second quarter that ended June 30, 2022, UNH's revenue increased 13% year-over-year to $80.30 billion. Its earnings from operations increased 19% year-over-year to $7.10 billion. The company's net earnings grew 18.8% from the year-ago value to $5.07 billion, while its adjusted EPS increased 18.6% from the prior-year quarter to $5.57.
Street expects UNH's revenues and EPS to rise 12% and 14.9% year-over-year to $322.08 billion and $21.86, respectively, in fiscal 2022. In addition, UNH's EPS is expected to rise at a 14.3% CAGR per annum over the next five years. Moreover, the company has an impressive earnings surprise history, as it topped Street EPS estimates in all of the trailing four quarters.
The stock has gained 31.7% over the past year and 10.5% over the past nine months.
UNH's POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
UNH has a B grade for Growth, Quality, and Stability. Within the A-rated Medical – Health Insurance industry, it is ranked #2 of 11 stocks.
To see additional POWR Ratings for Value, Momentum, and Sentiment for UNH, click here.
Biogen Inc. (BIIB)
BIIB develops, manufactures, and distributes medicines for neurological and neurodegenerative diseases. Additionally, it has collaboration and license agreements with Acorda Therapeutics, Inc., Alkermes Pharma Ireland Limited, Denali Therapeutics Inc., Eisai Co., Ltd., Genentech, Inc., Neurimmune SubOne AG, and Ionis Pharmaceuticals, Inc.
This month, BIIB and Denali Therapeutics Inc. (DNLI) announced that dosing has begun in the global Phase 3 LIGHTHOUSE study to compare the efficacy and safety profile of BIIB122 (DNL151) to placebo in approximately 400 participants with Parkinson's disease and a confirmed pathogenic mutation in the leucine-rich repeat kinase 2 (LRRK2) gene.
Last month, BIIB announced that the European Medicines Agency (EMA) had accepted the Marketing Authorization Application (MAA) for BIIB800, a biosimilar candidate referencing RoACTEMRA1 (tocilizumab), an anti-interleukin-6 receptor monoclonal antibody.
Ian Henshaw, Head of Global Biosimilars at Biogen, said, "The EMA filing acceptance for BIIB800 brings us a step closer to potentially offering broader patient access to another more affordable and important new biosimilar treatment option in Europe, and we look forward to continued engagement with the EMA throughout the review process.”
For the second quarter that ended June 30, 2022, BIIB's total revenue came in at $2.59 billion. Its total cost and expenses declined 39.8% year-over-year to $1.32 million. The company’s net income increased 135.9% from the year-ago value to $1.06 billion, while its EPS grew 142.1% from the prior-year quarter to $7.24.
BIIB’s EPS is expected to grow 5.3% in the next quarter. The stock has gained 34.7% over the past month and 21.4% over the past three months.
It is no surprise that BIIB has an overall B rating, which equates to Buy in our POWR Rating system. The stock also has an A grade for Value and Quality and a B for Sentiment. In the Biotech industry, it is ranked #2 of 385 stocks.
Beyond the POWR Rating grades I have just highlighted, you can view the BIIB ratings for Growth, Momentum, and Stability.
UNH shares were trading at $505.71 per share on Friday afternoon, down $13.42 (-2.59%). Year-to-date, UNH has gained 1.69%, versus a -22.58% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate.
2 Stocks with Great Track Records to Buy Right Now StockNews.com
