If you have enough capital and time, there are many safe industry leaders in the US market that may have the potential to grow fast and consistently enough to make you a millionaire in a couple of decades. And even though many investors are attracted to US tech stocks for their powerful growth potential, there are plenty of options in other sectors. One example would be the UnitedHealth Group (NYSE:UNH).
A global health insurance giant
With a market capitalization of US$508 billion, UnitedHealth Group is the largest health insurance conglomerate in the world. This Minnesota-based mega-cap company has a 12% market share of the global health insurance industry.
UnitedHealth Group is massive. It has two different business wings, Optum and UnitedHealth. Optum is a direct care delivery platform and serves over 127 million consumers. It works with almost 90% of the hospitals in the US.
UnitedHealth, on the other hand, caters to about 26.5 million Americans through individual or group (employer) healthcare plans.
Both business groups have an impressive reach, and based on their magnitude and financial resources, UnitedHealth Group is more likely to bring other complimentary businesses into the fold rather than be threatened by competition. So it’s a solid investment from a business perspective.
A safe dividend stock
Apart from two down phases, the UnitedHealth Group stock has been a consistent grower for the last three decades. It grew over 8,000% in the 15 years between December 1990 and December 2005. Then it slumped for a few years under its own weight and then because of the great recession. In 2009, it picked up from where it left off and has grown over 2,900% since then.
Both of these numbers are phenomenal, but they may not be sustainable in the long run, but even the relatively recent growth of the stock has been quite compelling. It has risen 184% in the last five years. And if we stretch out this pace for two decades into the future, we may see the stock grow about 700%. That’s enough to turn about $143,000 into a million dollars in two decades.
If the stock can sustain this growth phase for four or five decades, you can reach a million dollars with substantially less capital.
As one of the global giants in the health insurance market, UnitedHealth Group can be considered a safe investment. And its safety, coupled with its growth potential, makes it a uniquely powerful holding.
It also offers dividends, and even though the yield can be considered barely modest at 1.21%, the exchange rate will favour Canadian investors. And if you are investing a sum as hefty as $143,000 into the company, you may see yearly dividends of over $1,700.
You can easily find much faster growth stocks in the US stock exchanges, especially if you dive into the tech pool. But such stocks may not have what it takes to grow at a consistent pace for decades. Most tech stocks are vulnerable to major disruptions in the market. In contrast, a steady giant like UnitedHealth is a significantly more stable long-term holding.