CVS vs. UNH: Which Health Insurance Stock Has More Upside Now?

CVS Health CVS and UnitedHealth Group UNH, both S&P 500 companies, are two of the biggest players in the U.S. health insurance industry. CVS competes through its Aetna subsidiary, acquired in 2018, offering a broad range of products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, and Medicare Advantage and Medicare Supplement plans. The company also operates Health Services, Pharmacy & Consumer Wellness and Corporate/Other segments.

UnitedHealth, on the other hand, sells a broad range of health benefits through UnitedHealthcare, serving individuals and employers, seniors and other Medicare-eligible consumers, as well as economically disadvantaged and medically underserved populations. The company also has an information and technology-enabled health services business called Optum, comprising Optum Health, Optum Insight and Optum Rx. The divisions combine capabilities in value-based care, population health, health care operations, data and analytics and pharmacy care services.

Over the past six months, CVS and UNH shares have risen 13.9% and 33.2%, respectively, both outperforming the S&P 500 composite’s 11.9% growth.

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Let’s take a closer look at which stock has the stronger investment case today.

The Case for CVS

CVS Health is implementing technology infrastructure changes to modernize its platforms and accelerate data sharing and connectivity with providers and payer partners. The company has committed to invest $20 billion over the next decade to transform the health care experience through emerging technologies, with a focus on building a more consumer-based health care technology business.

Aetna’s margin recovery is becoming an important part of CVS’ long-term growth story.  Efforts around strengthening clinical programs, cost management, pricing and other operating improvements have driven more than $2 billion of year-over-year improvement in adjusted operating income so far in 2026. Management raised Health Care Benefits’ adjusted operating income outlook to $5.03-$5.37 billion for 2026, more than $1 billion above its previous guidance. Beyond pricing and utilization management, Aetna is simplifying claims and provider interactions through tools such as Claims Assist Manager and the Aetna Clinical Collaboration program.

The company’s Pharmacy and Consumer Wellness segment is gaining from higher prescription volume, including contributions from the Rite Aid transaction, alongside pharmacy drug mix and brand inflation. With the growing demand for GLP-1 medications, CVS Health is expanding support for these treatments across its more than 9,000 CVS Pharmacy locations and MinuteClinic, with virtual services available in nearly all states.

CVS raised its 2026 adjusted earnings per share (EPS) guidance to a range of $7.90-$8.10 and now expects total revenues to be at least $414 billion. However, Caremark faced pressure in its 340B business during the quarter, with management expecting related dynamics to weigh on Pharmacy Services and create a headwind in 2027. Caremark membership is also expected to decline next year amid changes in approaches to client renewals and the selling season, alongside product actions and market exits by some health plan customers.

The Case for UNH

UnitedHealth Group is driving stronger financial results on notable improvements across its two businesses. In the second quarter of 2026, UnitedHealthcare's better-than-expected performance was led by improved results in Medicare Advantage. The company’s actions around benefit design, care management models and network curation helped keep Medicare medical cost trends below expectations, while prior-year development, favorable respiratory season and weather patterns also contributed. 

UNH is working to address the gap between lagging reimbursement rates and underlying medical cost trends and is also partnering with states to support the long-term sustainability of Medicaid benefits and help identify and reduce fraud, waste and abuse.

Meanwhile, Optum remains a key growth engine, with all three segments performing ahead of plan through the first half of this year. Optum Health’s return to its integrated value-based care delivery model resulted in another quarter of better care management and operating discipline. 

Optum Rx has been leading an industry-wide shift toward transparency and fee-based services over the last few years, driving new customer wins while keeping retention rates in the high 90s. Optum Insight is seeing increasing traction for its AI-first enterprise approach, with products such as AI-enabled coding and real-time payer and provider interfaces, making health care simpler, faster and more affordable.

The company increased its full-year operating earnings outlook for UnitedHealthcare to at least $12 billion and at least $2.2 billion for Optum Health, reflecting ongoing operational improvements.

As of June 30, UNH’s cumulative operating cash flows were roughly $11 billion, or 1.9X net income, providing ample capital to strengthen the balance sheet, invest in growth and return value to shareholders. During the quarter, the company returned $2.1 billion to shareholders through dividends, with the annualized dividend raised to $9.28 per share.

Estimate Trend for CVS and UNH

The Zacks Consensus Estimate for CVS Health’s 2026 EPS implies year-over-year growth of 18.1% to $7.97. Estimates have jumped 7.1% in the past 60 days.

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The consensus mark for UnitedHealth Group’s 2026 EPS has risen 8.4% to $19.82 in the past 60 days. The estimate calls for a 21.2% increase from 2025.

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CVS & UNH’s Valuation

CVS trades at a forward sales multiple of 0.28, higher than its historical five-year median of 0.26. Meanwhile, UNH has a sales multiple of 0.78, representing a 35% discount to its five-year median of 1.20.

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Conclusion

CVS Health is making progress with Aetna’s margin recovery, gaining from Pharmacy & Consumer Wellness momentum, and has also raised its 2026 financial outlook. Meanwhile, Caremark is heading into 2027 with some challenges, including 340B-related headwinds and lower expected membership. UnitedHealth Group is seeing improving results across UnitedHealthcare and Optum, alongside strong operating cash flows and higher operating earnings expectations.

Both CVS Health and UnitedHealth Group are seeing upward revisions to their 2026 EPS estimates. Still, based on their respective historical multiples, UNH currently appears to be more attractively valued than CVS while also delivering a stronger six-month return. Considering all, UNH stands out as the stronger investment option now.

UNH sports a Zacks Rank #1 (Strong Buy), while CVS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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