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The Charles Schwab Corporation (SCHW) vs UnitedHealth Group Incorporated (UNH): Which Is the Better Buy in 2026?

As of 2026-11-01, SCHW is undervalued at $88, with a DCF intrinsic value of $275 and a margin of safety of 68%. UNH is overvalued at $407, with an intrinsic value of $367 and a margin of safety of -11%. Of the two, SCHW has the wider margin of safety.

SCHW
The Charles Schwab Corporation
$88.05
VS
UNH
UnitedHealth Group Incorporated
$406.97

Rewards

SCHW
  • ★Gross margin of 97.5% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
  • ★Free cash flow has grown at a 100.6% CAGR over the past 4 years, demonstrating strong earnings power growth.
  • ★Each dollar of retained earnings has created $1.89 of earning power — management is creating shareholder value.
UNH
  • ★UnitedHealth Group Incorporated scores 73/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.

Risks

SCHW
  • ⚠Altman Z-Score of 0.41 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
  • ⚠Insiders have sold $3.1M worth of stock in the past 3 months — significant insider liquidation.
UNH
  • ⚠ROIC has declined by 6.9 percentage points over the past 4 years, which may signal competitive erosion.
  • ⚠Gross margin of 20.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
  • ⚠FCF yield of 7.3% suggests reasonable valuation assuming continued moderate growth.

Key Valuation Metrics

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SCHW
UNH
Valuation
N/A
Free Cash Flow
$26.50B
N/A
FCF Yield
7.25%
15.05
Trailing P/E
23.23
11.28
Forward P/E
17.48
Quality & Moat
12.32%
ROIC
11.51%
21.12%
ROE
15.77%
97.51%
Gross Margin
20.05%
0.73
PEG Ratio
1.03
Balance Sheet Safety
Net cash
Net Debt / Equity
0.43
N/A
Interest Coverage
N/A
N/A
Net Debt / EBITDA
1.58
1.45%
Dividend Yield
2.28%
SCHW: 7Ties: 1UNH: 1
SCHWUNH

Historical Fundamentals

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SCHW

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.

UNH

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

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SCHW
$1.65
created per $1 retained over 3 years
Value Creator
Σ Retained
$12.98B
Δ Market Cap
+$21.38B
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
UNH
$-7.37
created per $1 retained over 3 years
Market Cap Declined
Σ Retained
$26.63B
Δ Market Cap
$-196.16B
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

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

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SCHW
68.0% Margin of Safety
Price is 68.0% below estimated fair value
Current Price: $88.05
Fair Value: $275.10
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued
UNH
10.8% Overvalued
Price is 10.8% above estimated fair value
Current Price: $406.97
Fair Value: $367.30
Strongly undervalued
Undervalued
Fairly valued
Overvalued
Strongly overvalued

Reverse DCF — Market-Implied Growth

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SCHW

Requires positive FCF to compute implied growth rate.

UNH

What growth rate is the market pricing in at $407?

+14.2%
Market-Implied Owner Earnings Growth
Standard FCF implies +4.2%

The market implies +14.2% Owner Earnings growth, above historical trends.

Standard FCF implies a demanding +4.2%, reflecting heavy growth investment.

Economic Moat Score

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SCHW
67/100
Narrow Moat
70+ Wide · 40-69 Narrow · <40 None

Narrow moat with reinvestment efficiency as the key competitive advantage. Improving margin stability would strengthen the moat.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.
UNH
73/100
Wide Moat
70+ Wide · 40-69 Narrow · <40 None

Wide moat driven primarily by revenue predictability. Margin Stability is the area most vulnerable to competitive pressure.

Composite score measuring competitive advantage durability across four dimensions: returns above cost of capital, pricing power stability, revenue predictability, and capital efficiency. Based on 4 years of fundamental data.

Forensic Accounting

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SCHW
-2.16
Possible Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

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.
UNH
-2.45
Unlikely Manipulator
Above -1.78 = likely manipulator · -2.22 to -1.78 = grey zone

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.

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

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SCHW
Insiders 6.2%Institutions 85.4%Retail & Other 8.4%
No. of Institutional Holders3,009
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.
UNH
Insiders 0.2%Institutions 89.6%Retail & Other 10.1%
No. of Institutional Holders4,333
High insider ownership aligns management incentives with shareholders — a key signal in Buffett-style analysis. Institutional concentration can indicate smart-money conviction but also crowding risk.

High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.

Insider Buying Activity

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SCHW
0
Buys (3M)
1
Buys (12M)
Total value (12M): $1.85M
WURSTER RICHARD A.
Chief Executive Officer
$1.85M
@ $84.23 · 2026-05-28
Open market purchases · includes direct & indirect ownership · excludes option exercises
UNH
0
Buys (3M)
0
Buys (12M)
No open market insider purchases found.
Open market purchases · includes direct & indirect ownership · excludes option exercises

Open market purchases · includes direct & indirect ownership · excludes option exercises.

Insider Selling Activity

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SCHW
2
Sells (3M)
11
Sells (12M)
Total value (12M): $19.82M
HOWARD DENNIS
Chief Technology Officer
$241,780
@ $110.00 · 2026-08-13
MURTAGH NIGEL J.
Officer
$2.91M
@ $109.01 · 2026-08-10
HOWARD DENNIS
Chief Technology Officer
$2.94M
@ $105.01 · 2026-07-28
MURTAGH NIGEL J.
Officer
$3.43M
@ $104.01 · 2026-07-27
MORGAN PETER J. III
General Counsel
$709,341
@ $102.03 · 2026-07-23
MURTAGH NIGEL J.
Officer
$422,069
@ $104.14 · 2026-07-21
MURTAGH NIGEL J.
Officer
$4.09M
@ $99.00 · 2026-04-14
HOWARD DENNIS
Chief Technology Officer
$956,228
@ $94.60 · 2026-03-03
MURTAGH NIGEL J.
Officer
$681,454
@ $94.61 · 2026-03-03
HOWARD DENNIS
Officer
$2.65M
@ $95.02 · 2026-02-25
MORGAN PETER J. III
General Counsel
$792,796
@ $104.38 · 2026-02-02
MORGAN PETER J. III
General Counsel
$4.85M
@ $97.00 · 2025-08-27
WURSTER RICHARD A.
Chief Executive Officer
$2.03M
@ $99.16 · 2025-07-29
MURTAGH NIGEL J.
Officer
$2.36M
@ $97.91 · 2025-07-29
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives
UNH
2
Sells (3M)
3
Sells (12M)
Total value (12M): $944,910
CONWAY PATRICK HUGH
Officer
$455,910
@ $390.00 · 2026-08-21
CONWAY PATRICK HUGH
Officer
$205,000
@ $410.00 · 2026-08-05
CONWAY PATRICK HUGH
Officer
$284,000
@ $355.00 · 2026-04-23
Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives

Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.

🎭 Mr. Market's Mood

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SCHW
FearGreed
😨Fear(38/100)

"Market is pessimistic — investigate whether fears are temporary or structural"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
UNH
FearGreed
😏Greed(62/100)

"Market is optimistic — be cautious and ensure you have a margin of safety"

Composite sentiment score based on 6 market signals. Inspired by Buffett's "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.

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

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SCHW
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Fear (38)
UNH
⚪Awaiting DCF Data

The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.

DCF Margin of Safety: N/AMr. Market's Mood: Greed (62)
View SCHW Full AnalysisView UNH Full Analysis

Frequently Asked Questions: SCHW vs UNH

Is The Charles Schwab Corporation or UnitedHealth Group Incorporated more undervalued in 2026?▼

Based on our discounted cash flow model, SCHW trades at a 68.0% margin of safety (intrinsic value $275 vs. price $88), compared to UNH's -10.8% margin of safety (intrinsic $367 vs. $407).

Which stock has a wider economic moat, The Charles Schwab Corporation or UnitedHealth Group Incorporated?▼

UNH scores 73/100 (Wide moat), while SCHW scores 67/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.

Is The Charles Schwab Corporation in financial distress?▼

SCHW's Altman Z-Score of 0.4 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 stock has higher return on invested capital, The Charles Schwab Corporation or UnitedHealth Group Incorporated?▼

SCHW earns 12.3% ROIC versus UNH's 11.5%. 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, The Charles Schwab Corporation's or UnitedHealth Group Incorporated's?▼

SCHW's dividend earns a safety score of 88/100 (Very Safe), compared to UNH's 84/100 (Very Safe). SCHW has raised its dividend for 1 consecutive years.

SCHW vs UNH: Which Is the Better Buy in 2026? | SafetyMargin.io