UnitedHealth Group Incorporated (UNH)vs Pfizer Inc. (PFE)

Quick verdict

The number that splits these two most cleanly is return on invested capital: UnitedHealth generated 12.4% in the twelve months to June 2026, against 3.7% at Pfizer for the twelve months to 28 June 2026. That gap matters because both carry substantial debt, and capital that earns barely above its cost leaves little room for reinvestment or deleveraging. Our factor verdicts follow that logic — UnitedHealth takes growth, quality and balance sheet, Pfizer takes income on a 6.05% dividend yield against 2.25%, and valuation and momentum are ties. The overall score is 4-2 to UnitedHealth. But the two are solving different problems: UnitedHealth is a $450.1bn-revenue insurer and health-services group with thin margins, while Pfizer is a $63.7bn drugmaker with wider margins working through a post-pandemic revenue reset. Neither scoreline settles which suits a given portfolio.

At-a-glance comparison

Business model and revenue mix

Scale is the first thing to register. UnitedHealth runs health-insurance plans through UnitedHealthcare alongside the Optum health-services, pharmacy and data operations, and booked $450.1bn of revenue in the twelve months to June 2026 — roughly seven times Pfizer's $63.7bn. That revenue arrives as premiums, so margins are structurally thin: 4.82% at the operating line, 3.14% net. Pfizer develops and sells vaccines and medicines across oncology, immunology, cardiology and infectious disease, a patent-protected model that converts a much smaller top line into a 10.85% operating margin and 6.80% net margin. Pfizer reports no operating-income line, so its operating profit of $6.9bn is measured before interest and tax. In absolute terms, though, UnitedHealth's $14.1bn of net income is more than three times Pfizer's $4.3bn, and its $23.6bn of free cash flow roughly double Pfizer's $11.0bn.

Valuation

On the headline multiples this is genuinely too close to call, and our verdict records a tie. At the 4 September 2026 close, UnitedHealth traded on 25.5 times trailing earnings and Pfizer on 37.4 times — but both denominators are depressed relative to each company's own recent history, which blunts the comparison. EV/EBITDA is nearer: 15.5 times for UnitedHealth, 16.6 times for Pfizer. Free cash flow yields are almost identical at 6.63% and 6.77%, which is arguably the cleanest read given how differently the two convert accounting profit to cash. Price-to-sales differs by construction rather than by sentiment — 0.79 for the insurer, 2.55 for the drugmaker — because premium revenue and pharmaceutical revenue carry entirely different margin profiles. Price-to-book gives UnitedHealth 3.41 against Pfizer's 1.90.

Growth profile

Here the divergence is stark, and the growth verdict goes to UnitedHealth. Revenue compounded at 11.35% a year from fiscal 2022 to fiscal 2025, and 11.72% from fiscal 2020 — consistent across both windows. Pfizer's record is bifurcated: revenue grew 8.48% annually from fiscal 2020 to fiscal 2025, but shrank 14.80% a year from fiscal 2022, reflecting the unwind of pandemic-era vaccine and treatment demand. The five-year figure is flattered by its 2020 starting point; the three-year figure is the more current signal. Earnings per share fell at both companies: UnitedHealth's EPS contracted 14.52% annually from fiscal 2022 and 3.77% from fiscal 2020, while Pfizer's fell 37.12% and 3.56% over the same windows. Neither has compounded earnings recently; UnitedHealth's advantage is that its revenue base is still expanding.

Profitability and quality

Quality favours UnitedHealth, though the margin table reads the other way at first glance. Pfizer posts the wider percentages — 73.18% gross margin, 10.85% operating, 6.80% net — against UnitedHealth's 88.57% gross, 4.82% operating and 3.14% net. Gross margin is not comparable across these business models, as an insurer's cost structure sits below that line. What decides it is what each earns on the capital deployed: UnitedHealth's 12.42% ROIC and 13.78% return on equity against Pfizer's 3.70% and 4.98%. Pfizer's return on equity is held down by a large equity base of $85.2bn relative to $4.3bn of net income, much of it acquisition-related. UnitedHealth turns a 3.14% net margin into a double-digit return because premium volume cycles capital quickly; Pfizer's higher margins are applied to a far smaller and currently shrinking revenue base.

Balance-sheet risk

Leverage separates the two more than the raw debt figures suggest. As at 30 June 2026 UnitedHealth carried $73.3bn of total debt against $28.6bn of cash, giving net debt of 1.72 times EBITDA and interest cover of 5.57 times. Pfizer's debt was slightly smaller at $63.2bn as at 28 June 2026, but cash of just $1.0bn leaves net debt at 4.61 times EBITDA with interest covered only 2.56 times — a materially tighter position, and the reason this factor goes to UnitedHealth. The one metric running the other way is the current ratio: Pfizer's 1.27 against UnitedHealth's 0.78, though sub-one current ratios are normal for insurers, whose liabilities include claims reserves funded by incoming premiums. On the measures that speak to debt-service capacity, UnitedHealth has the clearer headroom.

Price performance and shareholder returns

Income is Pfizer's one decisive win. The shares yielded 6.05% at the 4 September 2026 close, against UnitedHealth's 2.25%, on trailing dividends per share of $1.72 and $8.95 respectively. The caveat is coverage: Pfizer's payout ratio stands at 225.77% of trailing earnings, so the dividend is not covered by reported profit and rests on $11.0bn of free cash flow rather than the $4.3bn net income line. UnitedHealth's 57.33% payout leaves considerably more cushion, and it adds a 0.46% buyback yield; Pfizer repurchased nothing over the period. So the choice is a high yield with thin accounting cover against a lower yield with room to grow. Our income verdict names Pfizer on the strength of the headline number, but the two payout ratios describe very different levels of security.

Which stock fits which investor

The style tags capture it: UnitedHealth is tagged blend, Pfizer income and mature. An investor whose primary requirement is current cash yield will find Pfizer's 6.05% hard to replicate, provided they are comfortable that it exceeds trailing earnings at a 225.77% payout ratio and depends on free cash flow holding up. Anyone prioritising quality or growth is pointed to UnitedHealth, which wins both factors on 12.42% ROIC and 11.35% three-year revenue compounding, and carries the safer balance sheet at 1.72 times net debt to EBITDA. On value the two are tied — near-identical free cash flow yields of 6.63% and 6.77% and EV/EBITDA within roughly one turn. Overall the scoreline is 4-2 to UnitedHealth, but that reflects breadth across factors rather than any single decisive gap outside returns on capital.

• Value: Too close to call
• Growth: UNH
• Income: PFE
• Quality: UNH

Frequently asked questions

Which stock is cheaper, UNH or PFE?

Too close to call — our valuation verdict is a tie. At the 4 September 2026 close, free cash flow yields were near-identical at 6.63% for UnitedHealth and 6.77% for Pfizer, and EV/EBITDA was 15.5 times versus 16.6 times. The P/E gap (25.5 against 37.4) looks wider but both earnings bases are currently depressed.

Why is Pfizer's dividend yield so much higher?

Pfizer yielded 6.05% at the 4 September 2026 close against UnitedHealth's 2.25%, but its payout ratio is 225.77% of trailing earnings — the dividend exceeds reported profit and is supported by $11.0bn of free cash flow. UnitedHealth pays out 57.33% of earnings and also returns cash via a 0.46% buyback yield.

Which company has the stronger balance sheet?

UnitedHealth. As at 30 June 2026 it held $28.6bn of cash against $73.3bn of debt, for net debt of 1.72 times EBITDA and 5.57 times interest cover. Pfizer's $63.2bn of debt sits against just $1.0bn of cash, giving 4.61 times net debt to EBITDA and 2.56 times interest cover.

Why does Pfizer show wider margins but lower returns?

Pfizer's 10.85% operating margin and 6.80% net margin exceed UnitedHealth's 4.82% and 3.14%, yet its ROIC is 3.70% against 12.42%. The difference is capital intensity and asset base: Pfizer's $4.3bn of net income sits on $85.2bn of shareholders' equity, while UnitedHealth cycles premium volume through capital far faster.

Is Pfizer's revenue growing?

Not on the recent measure. Pfizer's revenue shrank 14.80% a year from fiscal 2022 to fiscal 2025 as pandemic-era demand unwound, though the five-year rate from fiscal 2020 is positive at 8.48% because of that low starting point. UnitedHealth grew revenue 11.35% annually over the same three-year window.

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