Looking for advice on Centene vs United Health. Overall my exposure to US health insurance as a % of total portfolio has grown to a level I’m not comfortable with holding, so I’ve been looking to trim / sell parts of it. However, I’m extremely torn on how to go about this.
For reference, UNH is currently up 35% for me, CNC on the other hand a whopping 125%, so UNH has been the clear laggard in that regard. Overall, I see UNH more stable and I like the dividend, but I do see some (or more) regulatory scrutiny risk with being a health insurance company + health care provider.
If both were still in their through, my choice would be to buy CNC, but the recent run up is the only thing leaving me question if selling UNH for CNC would be a mistake (and if UNH has room to play catch up). Does anybody have any thoughts on the business as a whole between the two?
Overview:
Adjusted EPS Guidance for 2026
UNH: Greater than $18.25 per share (raised following strong Q1 performance) CNC: Greater than $3.40 per share (raised from initial $3.00 guidance floor)
Expected Revenue for Full-Year 2026 UNH: Over $439.0 Billion (reflecting deliberate business right-sizing) CNC: $187.5 Billion to $191.5 Billion (with pure premium revenue making up $171.0 Billion to $175.0 Billion)
Medical Ratio (MCR / HBR) UNH: 88.8% expected full-year average (dropped to 83.9% during Q1) CNC: 90.9% to 91.7% expected full-year average (dropped to 87.3% during Q1)
Net Margin Profile UNH: Around 3.6% expected for 2026 (showing strong stability via Optum services) CNC: Around 1.5% to 2.0% non-GAAP expected (recovering from severe goodwill impairment hits in 2025)
Forward PE Ratio UNH: Roughly 18x to 20x forward earnings CNC: Roughly 14x to 15x forward earnings
Price-to-Sales (P/S) Ratio UNH: Around 1.0x sales CNC: Around 0.17x sales (significant top-line revenue leverage relative to market cap)
Dividend Yield UNH: Around 2.2% (consistent dividend growth history) CNC: 0% (reinvests all free cash flow into buybacks and aggressive debt reduction)