UnitedHealth Group (UNH  ) shares were higher following its better than expected Q1 earnings report which showed the company topping analysts' estimates on the top and bottom line and issuing a strong forecast for 2022.

Overall, UnitedHealth's shares have outperformed this year. The company provides investors protection against inflation. With increasing concerns of a recession that is induced by the Federal Reserve to tamp down inflation, defensive stocks like the managed care group have outperformed. YTD, the stock is up 7%, while the S&P 500 (SPY  ) is down 8%.

Inside the Numbers

In Q1, UnitedHealth reported $5.49 per share in earnings, a 3.4% increase from last year's Q1 and above analysts' estimates of $5.38 per share. Revenue was up 14.2%, reaching $80.2 billion which was well above analysts' estimates of $78.9 billion.

The medical cost ratio, which measures paid benefits as a share of premiums, increased to 82% from 80.9% last year. This is primarily due to increased visits to doctors and procedures due to less impact from the pandemic.

Medical membership increased by 335,000 on a quarterly basis and the company added 400,000 Medicare Advantage members and 155,000 Medicaid members. Another source of growth was Optum Health as this segment sees growth in value-based care delivery and pays for performance rather than being paid on a per-service basis. It sees growth of 600,000 new patients in 2022 which was above analysts' estimates of 500,000.

The company raised its full-year guidance to a range of $21.20 to $21.70, which is a slight increase from its previous range of $21.10-$21.60. This is in-line with analysts' estimates and a 13.6% increase from last year.

Stocks like UNH are connected to trends like demographics and the aging population which are less connected to factors creating volatility in the stock market. The one outside risk is some sort of restructuring of the health care system at the federal level which changes the economics of the health insurance business. This seems unlikely at this point, and the last major restructuring - ObamaCare - actually turned out to be a catalyst for the industry as more people became insured. Similarly, President Joe Biden is increasing spending on Medicare Advantage plans by 8.5% which is another boost for the stock.