Head to Head Analysis: Option Care Health (NASDAQ:OPCH) versus UnitedHealth Group (NYSE:UNH)
by Doug Wharley · The Cerbat GemUnitedHealth Group (NYSE:UNH – Get Free Report) and Option Care Health (NASDAQ:OPCH – Get Free Report) are both healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, analyst recommendations, institutional ownership, risk and valuation.
Earnings & Valuation
This table compares UnitedHealth Group and Option Care Health”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| UnitedHealth Group | $447.57 billion | 0.75 | $12.06 billion | $15.54 | 23.92 |
| Option Care Health | $5.69 billion | 0.60 | $207.59 million | $1.33 | 17.02 |
UnitedHealth Group has higher revenue and earnings than Option Care Health. Option Care Health is trading at a lower price-to-earnings ratio than UnitedHealth Group, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
UnitedHealth Group has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Option Care Health has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for UnitedHealth Group and Option Care Health, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| UnitedHealth Group | 0 | 8 | 20 | 0 | 2.71 |
| Option Care Health | 0 | 7 | 7 | 0 | 2.50 |
UnitedHealth Group currently has a consensus target price of $465.75, suggesting a potential upside of 25.29%. Option Care Health has a consensus target price of $29.92, suggesting a potential upside of 32.17%. Given Option Care Health’s higher possible upside, analysts plainly believe Option Care Health is more favorable than UnitedHealth Group.
Insider & Institutional Ownership
87.9% of UnitedHealth Group shares are owned by institutional investors. Comparatively, 98.1% of Option Care Health shares are owned by institutional investors. 0.2% of UnitedHealth Group shares are owned by company insiders. Comparatively, 1.7% of Option Care Health shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares UnitedHealth Group and Option Care Health’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| UnitedHealth Group | 3.14% | 16.53% | 5.43% |
| Option Care Health | 3.68% | 18.74% | 7.25% |
Summary
UnitedHealth Group beats Option Care Health on 8 of the 14 factors compared between the two stocks.
About UnitedHealth Group
UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The company operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage, and health and well-being services to individuals age 50 and older addressing their needs; Medicaid plans, children's health insurance and health care programs; and health and dental benefits, and hospital and clinical services, as well as health care benefits products and services to state programs caring for the economically disadvantaged, medically underserved, and those without the benefit of employer-funded health care coverage. The Optum Health segment provides care delivery, care management, wellness and consumer engagement, and health financial services patients, consumers, care delivery systems, providers, employers, payers, and public-sector entities. The Optum Insight segment offers software and information products, advisory consulting arrangements, and managed services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations. The Optum Rx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and community health pharmacy services, infusion, and purchasing and clinical capabilities, as well as develops programs in the areas of step therapy, formulary management, drug adherence, and disease/drug therapy management. UnitedHealth Group Incorporated was founded in 1974 and is based in Minnetonka, Minnesota.
About Option Care Health
Option Care Health, Inc. offers home and alternate site infusion services in the United States. The company provides anti-infective therapies; home infusion services to treat heart failures; home parenteral nutrition and enteral nutrition support services for numerous acute and chronic conditions, such as stroke, cancer, and gastrointestinal diseases; immunoglobulin infusion therapies for the treatment of immune deficiencies; and treatments for chronic inflammatory disorders, including crohn’s disease, plaque psoriasis, psoriatic arthritis, rheumatoid arthritis, ulcerative colitis, and other chronic inflammatory disorders. It also offers treatments to manage the progression of neurological disorders, such as multiple sclerosis, duchenne muscular dystrophy, and other neurological disorder; infusion therapies for bleeding disorders, such as hemophilia and von Willebrand diseases; therapies for women with high-risk pregnancies; and other infusion therapies to treat various conditions, including pain management, chemotherapy, and respiratory medications, as well as nursing services. The company markets its services through patient referrals, including physicians, hospital discharge planners, hospital personnel, health maintenance organizations, and preferred provider organizations. Option Care Health, Inc. is headquartered in Bannockburn, Illinois.