Amgen Inc. (AMGN) vs UnitedHealth Group Incorporated (UNH): Which Is the Better Buy in 2026?
As of 2026-06-19, AMGN is overvalued at $338, with a DCF intrinsic value of $286 and a margin of safety of -18%. UNH is fairly valued at $401, with an intrinsic value of $376 and a margin of safety of -7%. Of the two, UNH has the wider margin of safety.
Rewards
- ★Gross margin of 71.4% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Amgen Inc. scores 73/100 on the Economic Moat Score (Wide Moat), with reinvestment efficiency as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
- ★UnitedHealth Group Incorporated scores 73/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
Risks
- ⚠ROIC has declined by 7.7 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠PEG ratio of 2.30 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠High leverage (4.93x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠ROIC has declined by 6.9 percentage points over the past 4 years, which may signal competitive erosion.
- ⚠Gross margin of 18.8% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Free cash flow has declined at a 11.8% CAGR over the past 4 years — a concerning trend.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $338?
The market implies +8.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +13.5%, reflecting heavy growth investment.
What growth rate is the market pricing in at $401?
The market implies +14.1% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +9.8%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Wide moat driven primarily by reinvestment efficiency. Margin Stability is the area most vulnerable to competitive pressure.
Wide moat driven primarily by revenue predictability. Margin Stability is the area most vulnerable to competitive pressure.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: AMGN vs UNH
Is Amgen Inc. or UnitedHealth Group Incorporated more undervalued in 2026?▼
Based on our discounted cash flow model, UNH trades at a -6.6% margin of safety (intrinsic value $376 vs. price $401), compared to AMGN's -17.9% margin of safety (intrinsic $286 vs. $338).
Which stock has a wider economic moat, Amgen Inc. or UnitedHealth Group Incorporated?▼
UNH scores 73/100 (Wide moat), while AMGN scores 73/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Amgen Inc. in financial distress?▼
AMGN's Altman Z-Score of 1.7 places it in the Distress zone, signaling elevated bankruptcy risk. UNH scores 2.9 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Amgen Inc. or UnitedHealth Group Incorporated?▼
UnitedHealth Group Incorporated (UNH) generates a 4.9% free cash flow yield, compared to Amgen Inc.'s 4.1%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Amgen Inc. or UnitedHealth Group Incorporated?▼
UNH earns 15.6% ROIC versus AMGN's 14.9%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Amgen Inc.'s or UnitedHealth Group Incorporated's?▼
UNH's dividend earns a safety score of 84/100 (Very Safe), compared to AMGN's 69/100 (Safe). UNH has raised its dividend for 3 consecutive years.