UnitedHealth Group (UNH 2.78%) and Eli Lilly (LLY 2.26%) are two of the largest and most powerful healthcare companies in the world. One is a juggernaut that provides insurance, care services, and technological solutions to millions of providers and patients. The other is a pharmaceutical behemoth, the world's most valuable healthcare stock by market cap, with a valuation of $1 trillion.
However, these two stocks have gone in opposite directions in 2025. UnitedHealth Group has plummeted nearly 35% since January, a slide that began with the slaying of its insurance CEO last December. Meanwhile, Eli Lilly has soared almost 35%, as a favored competitor in the red-hot market for anti-obesity drugs. But which healthcare giant is the better buy heading into the New Year? Here is the stock to own, and why.
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Why UnitedHealth Group has plunged
Things have continued to go downhill for UnitedHealth Group since last December, following the public slaying of its insurance CEO. Since then, the company has faced investigations into allegations of fraud and misconduct related to its billing practices. It's also faced unexpectedly high costs, especially in its Medicare programs, which have dragged on earnings this year.
NYSE: UNH
Key Data Points
Management is working to right the ship by aggressively raising premiums for next year, even withdrawing from markets entirely where necessary. UHG currently estimates it will lose as many as 1 million members from its Medicare Advantage plans next year due to the changes, but it anticipates that the process will make the business more profitable.
Why Eli Lilly continues to soar
Weight loss drugs are arguably the most exciting healthcare opportunity today, with experts forecasting that sales could grow from $15 billion last year to $150 billion over the next decade. Eli Lilly and its archrival, Novo Nordisk, are currently the two primary players in the space. Lilly has steadily gained market share over the past 18 months as Novo Nordisk has made some missteps along the way.
NYSE: LLY
Key Data Points
Eli Lilly is currently enjoying outstanding revenue growth, including 54% year-over-year growth in the third quarter. The company's anti-obesity drug pipeline also looks fantastic. Its first oral weight loss medication, orforglipron, and its next-generation injectable treatment, retatrutide, are both currently in phase 3 clinical trials. These products could set Lilly up for strong growth over the next five to 10 years.
Which stock is the better buy for 2026?
It's easy to feel inclined to buy the dip in a stock like UnitedHealth Group. After all, it's arguably too big to fail; it's one of the key cogs in America's multitrillion-dollar healthcare system. The stock trades at a price-to-earnings ratio of 21 times full-year earnings estimates, which could be a solid entry point for long-term investors.
UHG's management expects earnings to resume growth next year and accelerate through 2027 as premium hikes take effect. Analysts estimate that this could result in 9% to 10% annualized growth over the next three to five years. Of course, that assumes no further performance setbacks, hardly a guarantee given how the company's current cost pressures sneaked up on it.
In contrast, Eli Lilly certainly doesn't look cheap, trading at 45 times full-year earnings estimates. However, its market share gains and upcoming products have analysts calling for 37% annualized earnings growth over the same period. Lilly also lacks the scrutiny UnitedHealth Group currently faces, although it could face public and political pressure to lower prices on its weight loss drugs more than it already has.
At these prices, both stocks look capable of delivering strong investment returns over the next five years. But this is a head-to-head contest, and Eli Lilly's red-hot momentum seems likely to continue into next year. That makes its shares a better buy, given the challenges UnitedHealth Group is still working through.
