UnitedHealth Group (UNH 8.94%) has attracted much attention over the past year, for both good and bad reasons. Recently, well-known value investors Warren Buffett of Berkshire Hathaway and Michael Burry of Scion Asset Management piled into the stock, clearly believing it has become a bargain.
Although either of those two men alone can often drive a stock's price higher simply by buying it, UnitedHealth hasn't bounced all that much lately. In many ways, the health insurer still looks undervalued, particularly given one key long-term demographic trend in this country.
An increasingly gray America
Simply put, the U.S. population keeps getting proportionally older. According to data compiled by the Census Bureau, in 2022, just under 58 million Americans -- 17% of the nation's population -- were 65 years of age or older.
Image source: Getty Images.
The Bureau estimates that in 2025, just three years later, that cohort has grown to comprise 19% of the total. And by 2030, when even the youngest of the Baby Boomers will have reached that milestone age, the count for 65 and overs will expand to more than 71 million souls, amounting to 21% of this country's population.
Looking even further ahead, that percentage is forecast to keep on growing -- it should hit 25%, according to the Bureau's projections, in 2065.
The point is, all things being equal, older people on average require more healthcare than younger ones, and in this country that means near-mandatory insurance coverage for those who can afford it.
It's good to be top dog
So UnitedHealthcare, as the health insurer with the largest market share in this country, is poised to benefit simply from this long-term demographic shift. While a growing market will mean intensifying competition, UnitedHealth's position in the market is strong, and at this point, hard to assail.
It's no wonder that investing icons like Buffett and Burry are bullish on the stock. Adding this beaten-down insurer to your portfolio might just be worth your while, too.
