UnitedHealth Group Incorporated (UNH) vs U.S. Bancorp (USB): Which Is the Better Buy in 2026?
As of 2026-11-01, UNH is overvalued at $407, with a DCF intrinsic value of $367 and a margin of safety of -11%. USB is undervalued at $59, with an intrinsic value of $103 and a margin of safety of 42%. Of the two, USB has the wider margin of safety.
Rewards
- ★UnitedHealth Group Incorporated scores 73/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Each dollar of retained earnings has created $2.15 of earning power — management is an exceptional capital allocator.
Risks
- ⚠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.
- ⚠Gross margin of 0.0% is low, suggesting a competitive or commodity-like market with limited pricing power.
- ⚠Altman Z-Score of 0.28 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
- ⚠Free cash flow has declined at a 27.7% 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 $407?
The market implies +14.2% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +4.2%, reflecting heavy growth investment.
Requires positive FCF to compute implied growth rate.
Economic Moat Score
Learn more →Wide moat driven primarily by revenue predictability. Margin Stability is the area most vulnerable to competitive pressure.
Narrow moat with revenue predictability as the key competitive advantage. Improving reinvestment efficiency would strengthen the moat.
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: UNH vs USB
Is UnitedHealth Group Incorporated or U.S. Bancorp more undervalued in 2026?▼
Based on our discounted cash flow model, USB trades at a 42.2% margin of safety (intrinsic value $103 vs. price $59), compared to UNH's -10.8% margin of safety (intrinsic $367 vs. $407).
Which stock has a wider economic moat, UnitedHealth Group Incorporated or U.S. Bancorp?▼
UNH scores 73/100 (Wide moat), while USB scores 60/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is U.S. Bancorp in financial distress?▼
USB's Altman Z-Score of 0.3 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, UnitedHealth Group Incorporated or U.S. Bancorp?▼
USB earns 12.1% 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, UnitedHealth Group Incorporated's or U.S. Bancorp's?▼
USB's dividend earns a safety score of 94/100 (Very Safe), compared to UNH's 84/100 (Very Safe). USB has raised its dividend for 3 consecutive years.