Humana Inc. (HUM) vs UnitedHealth Group Incorporated (UNH): Which Is the Better Buy in 2026?
As of 2026-06-19, HUM is undervalued at $361, with a DCF intrinsic value of $991 and a margin of safety of 64%. UNH is fairly valued at $401, with an intrinsic value of $376 and a margin of safety of -7%. Of the two, HUM has the wider margin of safety.
Rewards
- ★Humana Inc. scores 98/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Altman Z-Score of 4.08 indicates very low bankruptcy risk — the company is firmly in the safe zone.
- ★Net debt/EBITDA of -2.3x means the company holds more cash than debt — a net cash position.
- ★UnitedHealth Group Incorporated scores 73/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
Risks
- ⚠Gross margin of 14.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Trailing P/E of 38.4x is 58% above the historical average of 24.3x — the stock trades at a premium to its own history.
- ⚠PEG ratio of 2.09 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠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 $361?
The market implies +10.4% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +10.7%, 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 revenue predictability. 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 optimistic — be cautious and ensure you have a margin of safety"
"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: HUM vs UNH
Is Humana Inc. or UnitedHealth Group Incorporated more undervalued in 2026?▼
Based on our discounted cash flow model, HUM trades at a 63.6% margin of safety (intrinsic value $991 vs. price $361), compared to UNH's -6.6% margin of safety (intrinsic $376 vs. $401).
Which stock has a wider economic moat, Humana Inc. or UnitedHealth Group Incorporated?▼
HUM scores 98/100 (Wide moat), while UNH scores 73/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is UnitedHealth Group Incorporated in financial distress?▼
UNH's Altman Z-Score of 2.9 places it in the Grey zone, signaling elevated bankruptcy risk. HUM scores 4.1 (Safe 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, Humana Inc. or UnitedHealth Group Incorporated?▼
UnitedHealth Group Incorporated (UNH) generates a 4.9% free cash flow yield, compared to Humana Inc.'s 3.3%. 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, Humana Inc. or UnitedHealth Group Incorporated?▼
UNH earns 15.6% ROIC versus HUM's 15.3%. 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, Humana Inc.'s or UnitedHealth Group Incorporated's?▼
UNH's dividend earns a safety score of 84/100 (Very Safe), compared to HUM's 55/100 (Borderline). UNH has raised its dividend for 3 consecutive years.