5 days ago
UnitedHealth Stock (UNH) Tumbles 50% YTD; Here's How to Buy the Dip Without the Risk
UnitedHealth Group (UNH), the largest U.S. health insurer, recently suffered one of its worst stock plunges, down over 50% year-to-date following weak Q1 earnings and a lower full-year outlook. For long-term investors, this dramatic dip may present a buying opportunity, especially through exchange-traded funds (ETFs) that offer diversified exposure to UNH without the risk of holding the stock directly. Thus, investors seeking exposure to UNH stock may consider the Harbor Health Care ETF (MEDI) and T. Rowe Price Health Care ETF (TMED).
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Let's take a deeper look at these two ETFs.
Harbor Health Care ETF
The MEDI ETF is an actively managed fund that targets long-term capital growth by investing in healthcare companies. The ETF provides exposure to UnitedHealth stock alongside other major players like Ascendis Pharma (ASND), Eli Lilly (LLY), and Legend Biotech (LEGN). Importantly, UNH accounts for 5.6% of the MEDI ETF's total holdings.
Overall, the ETF has $16.24 million in assets under management (AUM). Also, it has an expense ratio of 0.8%. Over the past three months, the MEDI ETF has generated a return of 5%.
On TipRanks, MEDI has a Strong Buy consensus rating based on 36 Buys and two Holds assigned in the last three months. At $37.67, the average MEDI ETF price target implies 42.79% upside potential.
T. Rowe Price Health Care ETF
The TMED ETF is an actively managed fund that aims to capture long-term growth opportunities in the healthcare sector, including pharmaceuticals, biotechnology, medical devices, and healthcare services.
UNH stock constitutes 5.91% of the ETF's holdings. Apart from UnitedHealth, some of the top stocks in the TMED ETF are AbbVie (ABBV), Abbott (ABT), and Danaher (DHR). Overall, the ETF has $11.81 million in AUM. Also, it has an expense ratio of 0.44%. The TMED ETF has declined 5.35% in the past three months.
Turning to Wall Street, the ETF has a Moderate Buy consensus rating. Of the 110 stocks held, 99 have Buys, 10 have Holds, and one Sell rating. At $33.65, the average TMED ETF price target implies a 41.31% upside potential.
Concluding Thoughts
ETFs provide indirect exposure to UNH stock, reducing risk compared to investing directly in the stock. Furthermore, ETFs are a liquid and transparent way to participate in the market. Investors seeking ETF recommendations might consider MEDI and TMED, as these ETFs offer exposure to UnitedHealth stock.
