In this piece, we will take a look at the 10 best counter-cyclical and defensive stocks to invest in.
Volatility in the U.S. equity market is edging higher heading into year-end as investors react to a string of economic and geopolitical developments. Uncertainty over the outcome of the upcoming U.S. election is one headwind that is taking a significant toll on sentiments in the equity markets. Similarly, concern over a slowing economy crumbling amid high interest rates is also forcing investors to tweak their investment portfolios.
The damage has been done with the U.S. Federal Reserve expected to initiate a string of interest rate cuts in response to deteriorating economic conditions. The economy posting its weakest growth in the labor market in years is the earliest indication that things might not be well in the world’s largest economy.
READ ALSO: 10 Undervalued Cyclical Stocks to Buy According to Analysts and 10 Best US Stocks to Buy Under $5.
While the economy did bounce back in the second quarter, depicted by the gross domestic product growing by 2.8% compared to 1.6% in the first quarter, deterioration in the labor market is a concern forcing investors into stocks that won’t fall in a recession.
The economy added the lowest amount of jobs since 2021 in August, signaling that the economy is cooling after months of blockbuster gains. For starters, the Private sector payroll grew at the weakest pace, hiring just 99,000 workers.
A less-than-anticipated nonfarm payroll report for August contributed to the growing perception that the rate of employment expansion is slowing down. The Labor Department disclosed an increase in employment of 142,000, surpassing July but falling short of the 161,000 Dow Jones predictions.
Christopher Waller, a member of the Federal Reserve’s Board of Governors, did not outline a precise amount for the Fed’s reduction in interest rates or the exact timing that should support the economy. However, he expressed a willingness to consider the need for a forceful approach to maintaining employment levels while inflation approaches the Federal Reserve’s target of 2%.
Concerns over a slowing economy should continue sending jitters in the equity markets, as JPMorgan Chase Chief Jamie Dimon insists that stagflation could come into play even with the Fed cutting to try to boost economic growth. Stagflation could spell doom to the equity markets, especially cyclical stocks, whose performance depends on the economy’s health.
According to Dimon, inflationary pressures leading to higher deficits and increased infrastructure spending should continue to put more pressure on the economy as it tries to navigate the high interest rate environment. In August, the bank chief reiterated that there was a 35% to 40% chance of the economy plunging into recession.
Amid the recession concerns, pullbacks in the equity markets are more than expected, especially in September, billed as one of the worst months for stocks. Equity market valuation has already gotten out of hand after months of rallies fueled by the artificial intelligence frenzy and expectations of more than three interest rate cuts.
For investors looking to be on the front foot amid the expected pullbacks, the best counter-cyclical and defensive stocks to invest in could provide a way out. Counter-cyclical companies tend to do good when the economy is weak and suffer when business is booming, while non-cyclical stocks, or defensive stocks, stand out partly because economic conditions do not affect their core business. The fact that such companies mainly deal in goods and services that people cannot do without means they will always outperform with deteriorating economic conditions.
Lack of strength in the employment sector, changing expectations regarding the Federal Reserve’s forthcoming actions, concerns about a severe economic downturn, the possibility of persistent inflation, and the forthcoming presidential race. These are some of the problems that investors focused on non-cyclical stocks like Warren Buffet are never worried about.
To Warren Buffett, none of this big-picture economic jargon holds any significance. The “Oracle of Omaha” is a staunch advocate for the idea that successful investing hinges on identifying a great company that can shrug off macroeconomic concerns to deliver stellar returns and shareholder value.
Whether it’s buying a company’s stock or the entire company, the Berkshire chairman and CEO insist on focusing on high-quality stocks with tremendous growth prospects regardless of the prevailing economic conditions.
Pixabay/Public Domain
Our Methodology
To make our list of the 10 best counter-cyclical and defensive stocks to invest in we scoured through Yahoo Finance and Finviz stock screeners to find 20 high-quality stocks that were the most widely held by hedge funds. Next, we shortlisted our list to 10 stocks that hedge funds are increasingly building positions in. Finally, we ranked the stocks in ascending order based on the number of hedge funds that hold stakes.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Counter Cyclical and Defensive Stocks to Invest in
10. TriNet Group, Inc. (NYSE:TNET)
Market Capitalization as of September 11: $4.63 Billion
Number of Hedge Fund Investors in Q2 2024: 21
TriNet Group, Inc. (NYSE:TNET) is an industrial company that provides comprehensive and flexible human capital management services for small and medium-sized businesses. It offers multi-state payroll processing and tax administration employee benefits programs, including health insurance and retirement plans.
The company provides full-service H.R. solutions to small and midsize businesses, so it is well-positioned to receive a significant boost when rates go down. The Fed cutting rates are expected to make it easier for small businesses to access cheap capital to fuel their core business and, in return, fuel demand for TriNet H.R. solutions.
TriNet Group, Inc. (NYSE:TNET) announced a solid second quarter, achieving revenues close to the upper limit of its expectations. Revenue in the quarter was up 1% to $1.2 billion as the company navigated a challenging business environment. The growth was driven by a 5% increase in professional service revenues that totaled $186 million.
TriNet Group, Inc. (NYSE:TNET) ‘s careful management of costs led to strong profits and cash inflows, allowing the company to buy back $135 million of its shares and distribute $25 million in dividends. Even though it anticipates a modest to 3% increase in total revenues for the third quarter, TriNet sticks to its annual projections and remains hopeful about future expansion, especially in the area of benefits innovation.
TriNet Group, Inc. (NYSE:TNET)’s dedication to reinvesting profits back into its investors is impressive, shown by substantial buybacks of shares and distributions issued over the last three months. These recent events indicate the firm’s robust financial health and strategic efforts to maintain expansion. The stock rewards investors with an annualized dividend yield of 1.06% while trading at a discount with a price-to-earnings multiple of 15.
According to Insider Monkey’s second-quarter database, 21 hedge funds were bullish on TriNet Group, Inc. (NYSE:TNET) compared to 19 hedge funds from the previous quarter. William Von Mueffling’s Cantillon Capital Management remains the largest shareholder in TriNet Group, Inc. (NYSE:TNET), with 763,352 shares worth $76.34 million.
9. Robert Half Inc. (NYSE:RHI)
Market Capitalization as of September 11: $6.42 Billion
Number of Hedge Fund Investors in Q2 2024: 33
Robert Half Inc. (NYSE:RHI) is a staffing and employment services company that provides talent solutions and business consulting services. It provides contract engagement professionals in the fields of finance and accounting, technology, marketing, and creative. It also offers consulting services in the areas of internal auditing, technology consulting, and risk control.
It is one of the best countercyclical stocks to invest in as it is currently trading at a discount at a time when its core business is well poised to receive a significant boost. The company increasingly integrates artificial intelligence into its solutions as part of its commitment to technology and innovation.
Robert Half Inc. (NYSE:RHI) delivered mixed second-quarter results as revenues fell 10% to $1.47 billion. The underperformance was mostly attributed to the staffing recession and margin contraction in the contract talent solution segment, but the company remains optimistic.
Robert Half Inc. (NYSE:RHI) ‘s ability to generate profits has been the catalyst behind the company’s returning value through buybacks and dividends. The company has paid dividends for 21 consecutive years and currently yields 3.27%, which is ideal for generating some passive income.
According to Insider Monkey’s second-quarter database, 33 hedge funds were bullish on Robert Half Inc. (NYSE:RHI). Israel Englander’s Millennium Management holds the largest position in Robert Half Inc. (NYSE:RHI), with over 3.25 million shares valued at $208.04 million.
8. Novo Nordisk A/S (NYSE:NVO)
Market Capitalization as of September 11: $581.98 Billion
Number of Hedge Fund Investors in Q2 2024: 67
Novo Nordisk A/S (NYSE:NVO) is a healthcare company that researches and develops pharmaceutical products. It operates in two segments: Diabetes and Obesity Care and Rare Diseases. Its Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy.
Novo Nordisk A/S (NYSE:NVO) ‘s competitive edge as one of the best defensive stocks to invest in stems from its robust pipeline of drugs for the treatment of various medical conditions. Consequently, the company’s revenue stream is constantly guaranteed regardless of how the economy is doing.
Novo Nordisk A/S (NYSE:NVO) dominates the GLP-1 weight loss market, holding 69% of the global market share, with its diabetes medication Ozempic leading with 46% of that share. Launching and selling game-changing weight loss medication is the reason the company’s trailing 12-month revenue grew by 64% over the last year alone. The company’s long-term prospects remain intact, given that the market for obesity-fighting drugs is poised to reach more than $130 billion by 2030.
Sales at Novo Nordisk A/S (NYSE:NVO) increased by 22% in the first quarter, reaching $9.8 billion, and earnings climbed by 28% compared to the same period last year, reaching $3.8 billion. The company’s revenue growth of 29.72% during the same period highlights its ability to expand in a competitive market. A key factor contributing to my optimism about Novo Nordisk is its rapid expansion and the ability to maintain significant profit margins.
While the stock is trading at a price-to-earnings multiple of 31, it rewards income-focused investors with a 1.11% dividend yield. The company has shown commitment to shareholder returns, raising its dividend for 6 consecutive years and maintaining dividend payments for 36 consecutive years.
Sixty-seven hedge funds had investments in Novo Nordisk A/S (NYSE:NVO) in Q2 of 2024, worth $5.68 billion. The largest shareholder in the company is Fisher Asset Management, with a position worth $1.91 billion as of the second quarter of 2024.
Artisan Global Equity Fund stated the following regarding Novo Nordisk A/S (NYSE:NVO) in its Q1 2024 investor letter:
“In addition, shares of Novo Nordisk A/S (NYSE:NVO) rose after it reported phase 1 clinical trial results for its new experimental obesity drug Amycretin, a single molecule that operates as a GLP-1 receptor agonist, reducing one’s appetite. The new oral treatment achieved a 13.1% average weight loss after 12 weeks, more than doubling the efficacy of Wegovy for the same time span. This result also bested Lilly’s Orfoglipron, another experimental drug that achieved 5%–6% average weight loss earlier in its trials. While the Amycretin data are preliminary, investors were encouraged by the prospects of Novo Nordisk solidifying a best-in-class obesity designation, a desirable status given rising competition. In our view, Novo Nordisk has the best obesity/Type 2 diabetes pipeline in the industry, which should help protect this franchise from competition over the next 10 years.”
7. The Procter & Gamble Company (NYSE:PG)
Market Capitalization as of September 11: $408.98 Billion
Number of Hedge Fund Investors in Q2 2024: 64
The Procter & Gamble Company (NYSE:PG) is a consumer investment play that engages in the provision of branded consumer packaged goods. It operates through five segments: Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine, & Family Care.
As a leading worldwide company in consumer products, recognized for its brands such as Tide, Pampers, and Gillette, it offers a wide variety of offerings that ensure consistency, even in tough economic times.
The major consumer Products Company recognized for its extensive range of home items has demonstrated strong market performance, indicating a notable 1-year improvement with a remarkable 14.02% rise. Investors have demonstrated greater trust in the company’s potential for expansion and stability during market changes, pushing the stock to higher levels and establishing a solid foundation for its future direction.
The Procter & Gamble Company (NYSE:PG) achieved robust financial outcomes for the fiscal year 2024, experiencing a 4% growth in organic sales and a 12% increase in core earnings per share (EPS) to $6.59. During the fourth quarter, the firm observed a 2% growth in its organic sales and a 2% growth in its core EPS to $1.40. P&G’s online sales have also expanded by 9%, now representing 18% of its total sales.
While The Procter & Gamble Company (NYSE:PG) trades at a premium price to earnings multiple of 28.43, it is expected owing to its dominant position in the Household Products industry and its history of reliable earnings and robust growth.
At the end of Q2 2024, 64 hedge funds held stakes in The Procter & Gamble Company (NYSE:PG), with total investments amounting to $7.73 billion. As of June 30, Fisher Asset Management was the largest shareholder, holding a position worth $2.9 billion.
6. The Coca-Cola Company (NYSE:KO)
Market Capitalization as of September 11: $304.49
Number of Hedge Fund Investors in Q2 2024: 68
The Coca-Cola Company (NYSE:KO) is one of the best defensive stocks to invest in, as it operates as a beverage company manufacturing and selling various nonalcoholic beverages. It provides an array of sparkling soft drinks like water, coffee and tea juice, and plant-based beverages that people can consume regardless of the economic situation.
The beverage giant is among the most well-known brands in the globe. It’s so deeply rooted in society that it allows it to generate significant sales year-round. Brand loyalty shields it from newcomers competing for placement on store shelves. This means any business attempting to challenge its dominance must invest exorbitant sums to even start to rival the level of recognition it enjoys.
The value extends beyond the brand itself; the corporation behind it is equally significant. The Coca-Cola Company (NYSE:KO) has steadily expanded throughout the years and keeps advancing. It is a reliable, consistent enterprise that regularly adjusts to meet the needs of its customers.
The Coca-Cola Company (NYSE:KO) ‘s straightforward business model produces strong financial outcomes. Its revenue has grown at a compound annual growth rate (CAGR) of 6% over the past five years. Its free cash flow experienced a 7% CAGR during the same timeframe, and its net income saw an average growth rate of 10%.
Simply put, Coca-Cola’s sales are rising faster than inflation, and the company is also becoming more profitable as time goes on. Coca-Cola holds some of the highest profit margins in the market. Over the past year, Coca-Cola generated $46.5 billion in income, retaining $9.1 billion in free cash flow.
Amid the robust growth, The Coca-Cola Company (NYSE:KO) continues to return value to shareholders. It distributed dividends amounting to $8 billion last year. While Coca-Cola is priced at a slight premium of forward price to earnings multiple of 23, it also offers an annual dividend yield of 2.71%.
By the end of Q2 2024, 68 hedge funds held stakes in The Coca-Cola Company (NYSE:KO), with total investments amounting to $31.98 billion. As of June 30, Berkshire Hathaway was the largest shareholder, holding a position valued at $25.46 billion.
5. Philip Morris International Inc. (NYSE:PM)
Market Capitalization as of September 11: $193.54 Billion
Number of Hedge Fund Investors in Q2 2024: 70
Philip Morris International Inc. (NYSE:PM) is arguably a top consumer defensive stock amid the transition to a smoke-free future. The company’s edge as one of the best defensive stocks to invest in stems from offering products that are outside the tobacco and nicotine sector. Its product portfolio includes cigarettes and smoke-free products.
The firm is moving forward with its business change amidst an increase in consumer awareness about health and strict rules aimed at discouraging smoking. Even though the number of cigarettes sold in the U.S. is going down, Philip Morris International still sees strong interest from around the world because of more people being born and a wider acceptance of smoking in different cultures.
The manufacturer of Marlboro cigarettes and the IQOS tobacco heating device announced adjusted earnings per share (EPS) for the second quarter of $1.59, with income increasing by 9.6% compared to the previous year, reaching $9.47 billion.
Philip Morris International Inc. (NYSE:PM) saw a significant rise in the sales of its tobacco-free products, with sales climbing by 23.5% to 243.8 million cans. The sales of nicotine pouches also experienced a remarkable increase of 50.6% to 149.9 million cans, driven by the success of its Zen brand, which saw a 50.3% increase in the number of cans it delivered.
Philip Morris International Inc. (NYSE:PM) is also putting a lot of money into alternatives to smoking, like ZYN nicotine pouches, which made up roughly 38% of its total earnings in the first six months of 2024. To keep up with increasing demand, the company has put $232 million into its Owensboro, Kentucky production plant, which is anticipated to create about 450 direct new positions and bring in around $277 million in yearly economic benefits for the area.
In addition to the robust growth and expansion in pursuit of growth opportunities, it remains one of the best stocks to invest in owing to its attractive dividend yield of 4.10% while trading at a price-to-earnings multiple of 18.
By the end of Q2, 70 hedge funds held shares in Philip Morris International Inc. (NYSE:PM), with total stakes amounting to $9.54 billion. As of June 30, the largest shareholder was GQG Partners, managed by Rajiv Jain, with a position worth $3.67 billion.
4. NextEra Energy Inc. (NYSE:NEE)
Market Capitalization as of September 11: $169.16 Billion
Number of Hedge Fund Investors in Q2 2024: 73
NextEra Energy Inc. (NYSE:NEE) is a utility investment play and one of the best defensive stocks to invest in, as people will always use electric power regardless of the prevailing economic situation. The company distributes electric power to retail and wholesale customers across the U.S.
Given that the company mostly deals in clean energy generated from wind, solar, and natural gas, it underscores its competitive edge in the sector. The growing demand for clean energy to power data centers amid the artificial intelligence revolution underlines the company’s long-term prospects and growth metrics.
As demand for clean energy grows, NextEra Energy Inc. (NYSE:NEE) is well poised to fulfill this demand by strategically investing in enhancing and modernizing its infrastructure. Its subsidiary, Florida Power & Light Company (FPL), which encompasses Gulf Power, is set to allocate $43.8 billion over the 2024-2028 timeframe to these investments.
FPL’s priorities include the development of clean, efficient, and modern power generation, along with the improvement of a more advanced and intelligent electrical grid. Additionally, the favorable economic situation in Florida is further enhancing the company’s prospects.
There’s still a lot of potential for growth as the U.S. Department of Energy reports that solar and wind energy made up only 13% of the electricity produced within the country as of 2022, and this figure is expected to climb in the future. Moreover, the total demand for electricity in the United States is rising. NextEra stands to gain from its position in Florida. Government figures show that Florida’s large population and economy are among the most rapidly expanding in the country.
NextEra Energy Inc. (NYSE:NEE) distributes a yearly dividend of $2.06, which equals a yield of 2.50% based on its present share value. Its average dividend yield over the last four years stands at 2.26%. Additionally, the company’s dividend distributions have grown at a compound annual growth rate (CAGR) of 10.6% over the last five years.
As of the second quarter, NextEra Energy Inc. (NYSE:NEE) ‘s stock is held by 73 hedge funds with stakes worth $2.11 billion. GQG Partners is the largest shareholder in the company and has stocks worth $884.56 million as of June 30.
3. Walmart Inc. (NYSE:WMT)
Market Capitalization as of September 11: $626.45 Billion
Number of Hedge Fund Investors in Q2 2024: 95
Walmart Inc. (NYSE:WMT) is one of the best countercyclical stocks to invest in as a retail powerhouse operating supercenters, supermarkets, hypermarkets, and warehouse clubs. More than a tenth of its total income is generated from health and wellness products that are always in demand. It’s one of the top discount retailers in the world.
The retail behemoth provides affordable choices and essential home goods, making it a leading choice despite consumers reducing their spending on non-essential goods. Additionally, the surging need for home delivery and curbside pickup has led to a 21% increase in Walmart Inc. (NYSE:WMT) ‘s quarterly online sales.
WMT currently holds a significant edge in retail space compared to its rivals. Its expanding online sales and networks with other companies could further boost its success. This is particularly valid if the firm’s major investments in artificial intelligence lead to the improvements it aims for.
Walmart has never reported quarterly earnings that were lower than the previous year’s figures since 2017, underlining continuous growth regardless of economic conditions. It delivered better than expected Q2 2204 results, with revenues totaling $169.3 billion against the $168.6 billion expected. Earnings per share totaled $0.67 a share against $0.65 expected. The company upped its guidance for the full year. Sales growth is expected to range between 3.75% and 4.75%, from an initial guidance of 3% to 4% and a guidance for earnings growth of 6% to 9%.
Walmart Inc. (NYSE:WMT) is also becoming an advertising behemoth that further affirms why it is one of the best countercyclical stocks to invest in. In the second quarter, its U.S. ad business, Walmart Connect, grew by 30% and proved to be more profitable than the 4% operating margin in the retail industry.
While trading at a forward price-to-earnings multiple of 32, the stock offers a dividend yield of 1.05% for generating passive income.
Overall, 95 hedge funds held Walmart Inc. (NYSE:WMT) at the close of Q2 2024, with total stakes amounting to $9.19 billion. As of June 30, Fisher Asset Management was the largest shareholder, holding a position worth $3.08 billion.
2. Eli Lilly and Company (NYSE:LLY)
Market Capitalization as of September 11: $810.25 Billion
Number of Hedge Fund Investors in Q2 2024: 100
Eli Lilly and Company (NYSE:LLY) fits the bill as one of the best defensive stocks to invest in as it discovers, develops, and markets human pharmaceuticals that are crucial to the survival of human beings. The company offers leading products for treating diabetes, arthritis, and ulcerative colitis, among other medical conditions.
While the stock is trading near all-time highs, the 770% rally over the past five years has come on the company enjoying tremendous success with its lead products for diabetes and weight loss, Mounjaro and Zepbound. The company’s competitive edge stems from the quality and effectiveness of its drugs, which allows it to spend less on sales and marketing to generate revenues.
For a long time, Eli Lilly and Company (NYSE:LLY) ‘s success has been largely dependent on its best-selling diabetes medication, Trulicity, for expansion. However, with the green light for Mounjaro for diabetes treatment and Zepbound for weight reduction, the company’s landscape has changed significantly.
Eli Lilly and Company (NYSE:LLY) saw its revenues increase by 36% in the second quarter, reaching a total of $11.3 billion in sales. The revenue from Trulicity amounted to $1.2 billion, which was less than a quarter of the $3.1 billion in sales achieved by Mounjaro. Lilly raised its full-year 2024 revenue guidance by $3 billion, to between $45.4 billion and $46.6 billion, affirming expected growth.
Eli Lilly and Company (NYSE:LLY)’s shares are certainly expensive while trading at a price-to-earnings multiple of 39. However, it commands a significant premium due to its leading position in the market for weight loss medications. Moreover, with the numerous diseases linked to obesity that tirzepatide can address, the potential for Eli Lilly’s stock to soar is limitless.
During Q2 2024, 100 hedge funds held stakes in Eli Lilly and Company (NYSE:LLY), totaling $16 billion. Fisher Asset Management emerged as the leading stakeholder, owning nearly 5 million shares.
Baron Funds, an investment management company, released its second-quarter 2024 investor letter. Here is what the fund said:
“Shares of global pharmaceutical company Eli Lilly and Company (NYSE:LLY) increased on continued investor enthusiasm around GLP-1 drugs for diabetes and obesity. We remain shareholders. Lilly’s Mounjaro/Zepbound not only offers superb blood sugar control for diabetics but can drive 20%-plus weight loss and likely improve cardiovascular outcomes in both diabetic and non-diabetic obese patients. Lilly is developing next generation drugs, including retatrutide, which drives approximately 25% weight loss, and orforglipron, a daily pill that produces approximately 15% weight loss. In the U.S. alone, there are 32 million Type 2 diabetics and an additional 105 million obese patients who we estimate would qualify for GLP-1 drugs. Although supply and access are limited near term, we think GLP-1 drugs will become standard of care for both diabetes and obesity and will become a $150 billion-plus category. We see Lilly setting a high efficacy bar and capturing significant long-term market share. We think the adoption of GLP-1s will drive Lilly to triple total revenue by 2030.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
Market Capitalization as of September 11: $538.59 Billion
Number of Hedge Fund Investors in Q2 2024: 114
UnitedHealth Group Incorporated (NYSE:UNH) is a diversified healthcare company that offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, and small businesses.
It is one of the consumer defensive stocks trading at all-time highs following strong performance in a challenging economic environment. Its strong performance can be credited to the firm’s strategic plans, varied business approach, and knack for regularly achieving strong financial outcomes despite the wider market encountering challenges.
This record-breaking achievement establishes a new benchmark for UnitedHealth Group Incorporated (NYSE:UNH), as the firm keeps pushing forward with innovation and broadening its presence in the healthcare industry.
The reason UnitedHealth Group stands out as a leading stock for dividend growth is its knack for discovering new methods to expand and grow its operations. Concentrating on areas like analytics, home health, and various segments of the healthcare sector allows it to take advantage of the wide range of opportunities available in the industry.
Additionally, the expected increase in population in the coming years could act as a driving force, boosting the demand for health insurance. The company delivered solid second-quarter results, with earnings per share of $6.80, beating estimates by 2.3%. Revenue in the quarter was up 6.4% year over year to $98.9 billion.
The impressive quarterly results were bolstered by an expansion in the number of individuals served within the United States via United Healthcare and through UnitedHealth Group Incorporated (NYSE:UNH)’s arrangements focused on value-based care via Optus…
Currently, UnitedHealth distributes a quarterly dividend of $2.10 per share, offering a yield of 1.4%, which is higher than the average yield of the S&P 500, which stands at 1.3%.
By the end of Q2 2024, 114 investors were bullish on the stock, with total stakes reaching $12.5 billion. As of June 30, Fisher Asset Management held the largest position, valued at $1.57 billion.
Invesco Distributors, Inc. commented on UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH): Like many managed care providers, United Health has come under pressure from rising medical costs and higher-than-expected utilization. The stock is currently undervalued based on our analysis. We view the company as a high-quality compounder with secular growth opportunities in the managed care segment. The US Presidential election may cause additional near-term uncertainty, but we believe United Health will be able to rebound once pricing and utilization issues normalize.”
The Best Counter Cyclical and Defensive Stocks to Invest In are of companies poised to generate significant shareholder value regardless of a recession. However, given that the artificial intelligence arms race is just but starting, there are under-the-radar AI stocks trading at highly discounted valuations that hold greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than the top activist investment plays, check out our report about the cheapest AI stock.
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