⚠ Returns Below Their Old RangeHigh threat

UnitedHealth Group (UNH) — threat to the moat

UnitedHealth's return on capital fell from 18% to under 10% in two years, close to its cost of capital.

For most of a decade UnitedHealth earned well above its cost of capital. Return on invested capital, computed from EDGAR, was 13.6% in 2015, rose to 18.2% in 2023, then fell to 15.4% in 2024 and 9.7% in 20251. Against an assumed 8% hurdle, the margin of safety has almost gone.

Operating margin (%)8.7%20238.1%20244.2%2025UnitedHealth Group Form 10-K FY2025; earnings from operations $32,358M, $32,287M, $18,964M
The margin on which the returns depend halved in two years.

The fall reflects both lower operating earnings, $18,964 million in 2025 against $32,358 million in 20232, and a capital base swollen by acquisitions, with goodwill of $110,499 million3.

A single bad year does not end a moat, and 2026 earnings are recovering. But a company earning near its cost of capital has no economic advantage, whatever its size.

The company's own return on equity tells the same story. It reported 24.9% in 2020, 25.2% in 2021 and 27.2% in 20224, 27.0% in 2023, 15.9% in 2024 and 12.8% in 20255. Return on equity more than halved in two years.

Return on invested capital in 2026 settles it. A recovery above 13% would put it back in its old range; staying near 10% would say the acquired capital base earns too little.

References
  1. Moat Explorer calcReturn on invested capital, computed from EDGAR, was 13.6% in 2015, rose to 18.2% in 2023, then fell to 15.4% in 2024 and 9.7% in 2025.
    Moat Explorer calculation, tools_roic_edgar.py method on SEC EDGAR XBRL for CIK 731766: return on invested capital 13.6% (2015), 13.9% (2016), 16.8% (2017), 16.4% (2018), 16.5% (2019), 16.3% (2020), 17.3% (2021), 18.1% (2022), 18.2% (2023), 15.4% (2024), 9.7% (2025). — 2015-2025 · publ. September 2026 · source ↗
    Method: NOPAT (operating income x (1 - effective tax rate)) divided by average operating invested capital (total assets less current liabilities less cash), from SEC EDGAR XBRL via the tools_roic_edgar.py method.
  2. ReportedThe fall reflects both lower operating earnings, $18,964 million in 2025 against $32,358 million in 2023, and a capital base swollen by acquisitions, with goodwill of $110,499 million.
    UnitedHealth Group Form 10-K for fiscal 2025 - financial statements and notes: segment note, CMS concentration, balance sheet, cash flow and capital. — FY2025 · publ. 2 March 2026 · source ↗
  3. ReportedThe fall reflects both lower operating earnings, $18,964 million in 2025 against $32,358 million in 2023, and a capital base swollen by acquisitions, with goodwill of $110,499 million.
    UnitedHealth Group Form 10-K for fiscal 2025 - financial statements and notes: segment note, CMS concentration, balance sheet, cash flow and capital. — FY2025 · publ. 2 March 2026 · source ↗
  4. ReportedIt reported 24.9% in 2020, 25.2% in 2021 and 27.2% in 2022, 27.0% in 2023, 15.9% in 2024 and 12.8% in 2025.
    UnitedHealth Group Form 10-K for fiscal 2022 - medical care ratio, return on equity and diluted EPS for 2020-2022. — FY2022 · publ. February 2023 · source ↗
  5. ReportedIt reported 24.9% in 2020, 25.2% in 2021 and 27.2% in 2022, 27.0% in 2023, 15.9% in 2024 and 12.8% in 2025.
    UnitedHealth Group Form 10-K for fiscal 2025 - Item 1 business: segments, products, people served and leadership. — FY2025 · publ. 2 March 2026 · source ↗
Sources
Generated September 26, 2026