Home > Comparison > Healthcare > UNH vs CNC
The strategic rivalry between UnitedHealth Group Incorporated and Centene Corporation shapes the healthcare plans industry’s future. UnitedHealth operates as a diversified healthcare giant with integrated segments spanning insurance and health services. Centene focuses on government-subsidized managed care, targeting under-insured populations. This analysis explores their contrasting models and growth drivers to identify which offers a superior risk-adjusted return for diversified portfolios amid evolving sector dynamics.
Table of contents
Companies Overview
UnitedHealth Group and Centene Corporation are dominant players shaping the US healthcare plans market.
UnitedHealth Group Incorporated: Diversified Healthcare Powerhouse
UnitedHealth Group leads as a diversified healthcare company with four core segments: UnitedHealthcare, OptumHealth, OptumInsight, and OptumRx. Its revenue engine combines health benefit plans with care delivery, pharmacy services, and health data analytics. In 2026, the firm focuses on expanding integrated care and leveraging data-driven health management to drive growth.
Centene Corporation: Specialist in Government-Subsidized Care
Centene Corporation specializes in managed care for under-insured populations, primarily through government programs like Medicaid and Medicare. It generates revenue by offering comprehensive health plans and specialty services including pharmacy benefits and behavioral health. The company’s 2026 strategy targets expansion of state programs and enhancing specialty services to strengthen its market niche.
Strategic Collision: Similarities & Divergences
Both companies operate in healthcare plans but diverge sharply in approach. UnitedHealth pursues a broad, integrated platform model combining insurance and care services. Centene targets the government-subsidized segment with specialized plans and services. The battleground centers on Medicaid and Medicare markets. Their distinct profiles reflect a contrast between scale-driven diversification and focused service specialization.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | UnitedHealth Group Incorporated (UNH) | Centene Corporation (CNC) |
|---|---|---|
| Revenue | 448B | 195B |
| Cost of Revenue | 365B | 171B |
| Operating Expenses | 64B | 31B |
| Gross Profit | 83B | 24B |
| EBITDA | 23B | -5.1B |
| EBIT | 19B | -6.4B |
| Interest Expense | 4B | 678M |
| Net Income | 14.2B | -6.7B |
| EPS | 15.66 | -13.61 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company delivers the most efficient and profitable corporate engine under current market conditions.
UnitedHealth Group Incorporated Analysis
UnitedHealth’s revenue climbed steadily from 288B in 2021 to 448B in 2025, a 56% growth over five years. However, net income declined from 17.3B in 2021 to 14.2B in 2025, reflecting margin pressure. Its gross margin stands at a stable 18.5%, while net margin fell to 3.2%. The 2025 year shows a revenue jump of 11.8% but a net income dip, signaling margin compression and rising operating expenses.
Centene Corporation Analysis
Centene expanded revenue sharply from 126B in 2021 to 195B in 2025, a 55% increase. Yet, it swung from a positive 1.3B net income in 2021 to a -6.7B loss in 2025. Gross margin remained modest at 12.2%, but the negative EBIT margin (-3.3%) and net margin (-3.4%) highlight deteriorating profitability. Despite strong top-line growth, the 2025 year reveals a collapse in earnings and rising losses, reflecting operational inefficiencies.
Margin Stability vs. Growth at a Cost
UnitedHealth maintains healthier margins and consistent profitability despite recent earnings setbacks. Centene’s rapid revenue growth comes with steep losses and negative profitability, signaling risk. UnitedHealth’s profile offers stability and margin discipline, while Centene represents a high-growth but loss-making venture. Investors favoring reliable earnings will likely find UnitedHealth’s approach more attractive.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies analyzed:
| Ratios | UnitedHealth Group Incorporated (UNH) | Centene Corporation (CNC) |
|---|---|---|
| ROE | 14.2% | -33.4% |
| ROIC | 9.4% | -18.9% |
| P/E | 21.1 | -3.0 |
| P/B | 3.0 | 1.01 |
| Current Ratio | 0.79 | 1.10 |
| Quick Ratio | 0.79 | 1.10 |
| D/E | 0.78 | 0.87 |
| Debt-to-Assets | 25.3% | 22.7% |
| Interest Coverage | 4.7 | -11.2 |
| Asset Turnover | 1.45 | 2.54 |
| Fixed Asset Turnover | 0 | 95.6 |
| Payout ratio | 97.2% | 0% |
| Dividend yield | 4.60% | 0% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios serve as the company’s DNA, exposing hidden risks and operational strengths that shape investment decisions.
UnitedHealth Group Incorporated
UnitedHealth shows a neutral 14.21% ROE and 3.18% net margin, indicating moderate profitability. Its P/E of 21.12 suggests a fairly valued stock, though a high P/B of 3.0 flags potential overvaluation. The company rewards shareholders with a 4.6% dividend yield, reflecting steady income rather than aggressive reinvestment.
Centene Corporation
Centene reveals troubling profitability with a -33.44% ROE and -3.43% net margin, signaling operational losses. Despite favorable valuation metrics—P/E at -3.03 and P/B near 1.01—the stock appears risky. It pays no dividend, likely prioritizing survival or turnaround efforts over shareholder returns.
Valuation Balance vs. Profitability Stability
UnitedHealth balances moderate profitability with a reasonable valuation and consistent dividend, offering operational safety. Centene’s attractive valuation masks deeper profitability issues and negative returns. Investors seeking stability may prefer UnitedHealth, while those with higher risk tolerance might consider Centene’s turnaround potential.
Which one offers the Superior Shareholder Reward?
UnitedHealth Group (UNH) pays a healthy 4.6% dividend yield with a payout ratio near 97%, well covered by its strong free cash flow of $35B in 2025. It also executes consistent buybacks, supporting shareholder returns. Centene (CNC) offers no dividend and posts negative net margins in 2025, signaling operational challenges. CNC’s modest buybacks pale compared to UNH’s capital return intensity. Historically, UNH’s balanced dividend and buyback strategy aligns with sustainable free cash flow generation and robust profitability. I conclude UNH delivers a far superior total shareholder return profile for 2026 investors.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of UnitedHealth Group and Centene Corporation, highlighting their distinct financial strengths and weaknesses:
UnitedHealth shows a balanced profile with very favorable DCF and strong profitability metrics (ROE 4, ROA 4). However, it carries high financial risk with a very unfavorable debt-to-equity score. Centene relies heavily on valuation appeal (P/B score 4) but suffers from weak profitability (ROE 1, ROA 1) and elevated financial risk, matching UNH’s poor debt score. UNH’s profile is more balanced; Centene depends on a specific valuation edge.
Bankruptcy Risk: Solvency Showdown
Both companies fall within the Altman Z-score grey zone, signaling moderate bankruptcy risk in this market cycle:
UnitedHealth posts a 2.29 score, slightly weaker than Centene’s 2.68, but both remain vulnerable. Investors should watch for liquidity pressures as neither firm is clearly in the safe zone.
Financial Health: Quality of Operations
UnitedHealth leads with a Piotroski F-score of 7, indicating strong operational health, while Centene’s 6 signals average financial condition:
UNH’s higher score reflects better profitability, leverage management, and efficiency. Centene’s lower score raises mild red flags about internal financial stability compared to its peer. I see UNH as the safer operational bet.
How are the two companies positioned?
This section dissects UNH and CNC by comparing their revenue distribution and internal dynamics, highlighting strengths and weaknesses. The goal is to confront their economic moats and identify the more resilient competitive advantage.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how UnitedHealth Group and Centene diversify their income streams and where their primary sector bets lie:
UnitedHealth Group anchors revenue in UnitedHealthcare at $298B, with strong contributions from Optum segments, showing a balanced ecosystem. Centene pivots mainly on Medicaid at $124B, with Commercial at $34B, reflecting concentration risk in government programs. UNH’s diversified mix supports infrastructure dominance and resilience, while CNC’s focus exposes it to policy shifts but leverages Medicaid scale effectively.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of UnitedHealth Group (UNH) and Centene Corporation (CNC):
UNH Strengths
- Diversified segments with strong revenue from Optumhealth and UnitedHealthcare
- Favorable WACC at 5.33% supports capital efficiency
- Favorable debt-to-assets ratio at 25.32% indicates moderate leverage
- High asset turnover of 1.45 suggests operational efficiency
- Dividend yield of 4.6% attracts income-focused investors
CNC Strengths
- Favorable WACC at 4.6% supports cost-effective capital use
- Positive asset turnover at 2.54 and exceptional fixed asset turnover at 95.62
- Favorable price-to-book ratio at 1.01 implies undervaluation
- Quick ratio of 1.1 indicates adequate short-term liquidity
- Favorable net margin status relative to price/valuation metrics
UNH Weaknesses
- Unfavorable net margin at 3.18% limits profitability
- Low current and quick ratios at 0.79 signal liquidity concerns
- Unfavorable price-to-book ratio at 3.0 may indicate overvaluation
- Fixed asset turnover at 0 flagged as a concern
- Mixed ratio evaluations with 35.71% unfavorable
CNC Weaknesses
- Negative net margin at -3.43% and poor returns on equity (-33.44%) and invested capital (-18.85%)
- Negative interest coverage at -9.46 signals financial distress
- Zero dividend yield limits income appeal
- Narrow diversification mainly in Medicaid and commercial segments
- Despite favorable valuation ratios, operational profitability is weak
UnitedHealth’s strength lies in its diversified business model and capital efficiency despite liquidity and valuation concerns. Centene exhibits favorable valuation and operational turnover but faces significant profitability and financial stability challenges. This contrast underscores differing strategic priorities for revenue diversification versus valuation recovery.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat protects long-term profits from relentless competition erosion. Here’s how UnitedHealth Group and Centene Corporation stack up:
UnitedHealth Group Incorporated: Diversified Healthcare Network Moat
UnitedHealth’s moat stems from its integrated care delivery and data analytics via Optum segments. This drives a high ROIC, although profitability shows signs of decline in 2026. Expanding data-driven services could deepen this moat.
Centene Corporation: Medicaid-Focused Scale Advantage
Centene’s moat relies on scale in government-subsidized healthcare programs, contrasting UnitedHealth’s broader integration. Despite strong revenue growth, its negative ROIC signals value destruction and margin pressures in 2026. Expansion into specialty services offers limited relief.
Integrated Care vs. Medicaid Scale: Moat Depths in Healthcare Plans
UnitedHealth holds a wider, more sustainable moat with positive ROIC and diversified revenue streams. Centene’s shrinking returns and heavy reliance on Medicaid expose it to greater competitive risk. UnitedHealth stands better poised to defend market share.
Which stock offers better returns?
The past year shows steep declines for both stocks, with UnitedHealth Group accelerating its losses and Centene reversing recent weakness into modest gains.
Trend Comparison
UnitedHealth Group’s stock fell 43.64% over the past year, marking a bearish trend with accelerating decline and high volatility. The price ranged widely between 615.81 and 237.77.
Centene’s stock dropped 49.04% over the same period, also bearish with accelerating losses but lower volatility. Recently, Centene reversed to a 5.37% gain, indicating a nascent upward momentum.
Comparing trends, both stocks suffered steep yearly losses, but Centene’s recent rebound outperformed UnitedHealth’s continued decline, delivering stronger short-term market performance.
Target Prices
Analysts show a moderately bullish consensus for UnitedHealth Group and Centene Corporation.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| UnitedHealth Group Incorporated | 327 | 444 | 385.38 |
| Centene Corporation | 38 | 59 | 45.67 |
UnitedHealth’s consensus target at 385.38 significantly exceeds its current price of 276.65, indicating strong upside potential. Centene’s target consensus of 45.67 also suggests room for appreciation above its 38.46 market price.
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How do institutions grade them?
UnitedHealth Group Incorporated Grades
Here are recent grades assigned by reputable financial institutions to UnitedHealth Group Incorporated:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Mizuho | Maintain | Outperform | 2026-02-05 |
| Truist Securities | Maintain | Buy | 2026-02-02 |
| JP Morgan | Maintain | Overweight | 2026-02-02 |
| Wells Fargo | Maintain | Overweight | 2026-01-30 |
| Barclays | Maintain | Overweight | 2026-01-30 |
| Oppenheimer | Maintain | Outperform | 2026-01-28 |
| Leerink Partners | Maintain | Outperform | 2026-01-28 |
| Jefferies | Maintain | Buy | 2026-01-28 |
| UBS | Maintain | Buy | 2026-01-28 |
| RBC Capital | Maintain | Outperform | 2026-01-28 |
Centene Corporation Grades
Below are recent grades assigned by established grading firms to Centene Corporation:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | Maintain | Equal Weight | 2026-01-07 |
| Barclays | Upgrade | Overweight | 2026-01-05 |
| Bernstein | Maintain | Outperform | 2025-11-21 |
| Wells Fargo | Maintain | Equal Weight | 2025-11-12 |
| JP Morgan | Maintain | Neutral | 2025-11-04 |
| Barclays | Maintain | Equal Weight | 2025-11-04 |
| TD Cowen | Maintain | Hold | 2025-10-31 |
| Goldman Sachs | Maintain | Sell | 2025-10-31 |
| Cantor Fitzgerald | Maintain | Neutral | 2025-10-30 |
| Truist Securities | Maintain | Buy | 2025-10-30 |
Which company has the best grades?
UnitedHealth Group consistently receives strong positive grades, predominantly Outperform and Buy. Centene’s ratings are more mixed, ranging from Sell to Outperform. UnitedHealth’s superior consensus could suggest more robust institutional confidence, potentially affecting investor sentiment and valuation.
Risks specific to each company
The following categories identify critical pressure points and systemic threats facing UnitedHealth Group Incorporated and Centene Corporation in the 2026 market environment:
1. Market & Competition
UnitedHealth Group Incorporated
- Dominates with diversified healthcare segments and strong market cap of $250.6B. Faces pressure from innovation and regulatory changes.
Centene Corporation
- Focuses on government-subsidized programs with $18.9B market cap. Faces intense competition in Medicaid and specialty services.
2. Capital Structure & Debt
UnitedHealth Group Incorporated
- Debt-to-assets favorable at 25.3%, but low current and quick ratios (0.79) signal liquidity risks. Moderate debt-to-equity ratio (0.78).
Centene Corporation
- Debt-to-assets favorable at 22.7%, better liquidity (current and quick ratio 1.1). Interest coverage negative (-9.46) raises solvency concerns.
3. Stock Volatility
UnitedHealth Group Incorporated
- Beta of 0.415 indicates low stock volatility, offering stability relative to the market.
Centene Corporation
- Slightly higher beta at 0.488 suggests moderate volatility, increasing risk for investors.
4. Regulatory & Legal
UnitedHealth Group Incorporated
- Faces ongoing regulatory scrutiny due to size and diversified services, but strong compliance infrastructure limits exposure.
Centene Corporation
- Higher regulatory risk due to focus on government programs and vulnerable populations, increasing legal exposure.
5. Supply Chain & Operations
UnitedHealth Group Incorporated
- Robust operational network across four segments supports resilience; however, fixed asset turnover is weak (0).
Centene Corporation
- High fixed asset turnover (95.62) signals efficient asset use, but reliance on government contracts may affect operational flexibility.
6. ESG & Climate Transition
UnitedHealth Group Incorporated
- Increasing ESG focus with established governance frameworks; exposure to climate risks moderate due to diversified services.
Centene Corporation
- ESG initiatives developing but lag behind peers; social responsibility critical given client base; climate transition poses emerging risks.
7. Geopolitical Exposure
UnitedHealth Group Incorporated
- Primarily US-focused, limiting geopolitical risks but sensitive to domestic policy shifts and healthcare reforms.
Centene Corporation
- Also US-centric with exposure to state-level healthcare policy instability; international risks minimal but political changes impactful.
Which company shows a better risk-adjusted profile?
UnitedHealth faces liquidity and valuation concerns despite its scale and diversification. Centene struggles with profitability and solvency risks, amplified by regulatory and interest coverage weaknesses. UnitedHealth’s lower stock volatility and stronger credit metrics suggest a more balanced risk-adjusted profile. Its Altman Z-Score of 2.29 (grey zone) and a strong Piotroski score of 7 highlight sound financial health. Centene’s higher Altman Z-Score (2.68) is offset by negative profitability metrics and a weak Piotroski score of 6. The most pressing risk for UnitedHealth is its unfavorable liquidity ratios, while Centene’s critical risk lies in its negative interest coverage and poor profitability. UnitedHealth’s stable dividend yield (4.6%) contrasts with Centene’s lack of dividends, reinforcing UnitedHealth’s defensive position in turbulent markets.
Final Verdict: Which stock to choose?
UnitedHealth Group’s superpower lies in its ability to create consistent economic value with a strong moat, driven by efficient capital use and scale. Its main point of vigilance is the declining profitability trend, which might pressure future returns. It suits portfolios targeting steady, large-cap healthcare exposure with moderate growth.
Centene’s strategic moat stems from its unique position in managed care with a lean asset base and improving free cash flow. Relative to UnitedHealth, it offers a more favorable valuation and liquidity profile but faces significant profitability and operational challenges. It fits investors seeking value opportunities with turnaround potential.
If you prioritize durable competitive advantages and capital efficiency, UnitedHealth outshines as the more stable choice due to its moat and scale. However, if you seek undervalued stocks with potential for operational improvement, Centene offers a more compelling scenario despite higher risk. Both require careful monitoring of profitability and cash flow evolution.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of UnitedHealth Group Incorporated and Centene Corporation to enhance your investment decisions:
