MRK & UNH: Should you explore these US healthcare stocks?

Highlights

• Healthcare stocks can act as a cushion in times of volatility and generally involve a high degree of innovation.
• Merck & company offers a quarterly dividend of US$ 0.73.
• UnitedHealth Group offers a quarterly dividend of US$ 1.5.

The healthcare sector offers a wide range of investment opportunities as there are many different types of companies in this sector. There may be both growing stocks and large-cap companies with a well-established financial track record in this sector.

Many of these healthcare companies saw exponential growth during the pandemic. With healthcare evolving constantly, there is high scope for these companies to advance. Additionally, this sector is heavily technology-intensive, which allows room for innovation.

These benefits of healthcare stocks have made them the perfect cushion during many of the volatile spells seen in the market. With that, it is time to explore two US healthcare stocks- MRK and UNH.

Merck & Company Inc.

Merck is engaged in developing pharmaceutical products to treat conditions such as cardiometabolic diseases, cancer and infections. The company also has vaccines and treatments that prevent hepatitis B and pediatric diseases, among other ailments. The company has almost half its customer base in the United States.

The company reported a total revenue of US$ 13.83 billion during the December 2022 quarter, which marked an increase of 21.72% over the same quarter last year. The EBITDA for the quarter was US$ 4.64 billion, and the basic EPS stood at 1.19 during the December 2022 quarter.

© 2023 Krish Capital Pty. Ltd.

The company’s free cash flow during the quarter was US$ 3.281 billion, which marked an annual jump of 52.23%. Merck has received growing recognition, with the latest being its mention in Barron’s 100 Most Sustainable US Companies. The company offers a quarterly dividend of US$ 0.73, with a dividend yield of 2.609%.

UnitedHealth Group Inc.

UnitedHealth is a global organization and has provided medical benefits to a wide membership base of 50 million. However, the company provides most of its services inside the US, with only 5 million members being services outside the country at the end of 2021.

The company primarily offers insurance services and invests in its Optum franchise, which is focused on providing customers medical and pharmaceutical benefits and outpatient care.

© 2023 Krish Capital Pty. Ltd.

With US$ 81.9 billion in total revenue during the December 2022 quarter, the company offers its investors a quarterly dividend of US$ 1.5. The stock has a dividend yield of 1.296% and a P/E ratio of 23.30.

The quarterly EBITDA was reported to be US$ 7.873 billion, which marked an annual rise of 17.59%. The company’s operating cash flow was US$ 4.533 billion, and free cash flow was US$ 5.399 billion for the December 2022 quarter.