10 Most Promising Dividend Stocks According to Hedge Funds

2. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 112

UnitedHealth Group Incorporated (NYSE:UNH) is an American health insurance company, based in Minnesota. In 2024, the company encountered substantial challenges, including a $6 billion setback from Medical Cost Ratios (MCR) and the effects of the Inflation Reduction Act (IRA) on expensive medications. However, UnitedHealth’s proactive steps, such as adjusting pricing strategies and continuing to invest in Medicare Advantage (MA), have allowed it to handle regulatory and market pressures more effectively. Moving into 2025, UNH plans to tackle these challenges by focusing on regulatory changes in MA, scaling AI-driven models, and enhancing operational efficiencies across its commercial and Medicare sectors. The stock has surged by over 6% in the past 12 months.

UnitedHealth Group Incorporated (NYSE:UNH) recently revealed its FY24 earnings, exceeding investor expectations with an outstanding performance. It reported revenue of $400 billion, reflecting an 8% increase from the previous year, driven by expanded services throughout the organization. The company’s operational earnings for the year reached $32.3 billion. After excluding expenses related to responding to a cyberattack and challenges in South America, adjusted operational earnings were $34.4 billion.

UnitedHealth Group Incorporated (NYSE:UNH) met investor expectations with impressive cash flow results. For the full year, the company generated $24.2 billion in cash flows from operations, which is 1.6 times its net income. Throughout 2024, it returned over $16 billion to shareholders via dividends and stock buybacks. In Q4, its return on equity was 23.7%, showcasing strong earnings and an efficient capital structure.

UnitedHealth Group Incorporated (NYSE:UNH) also has a solid dividend history, having started annual dividend payments in 1990 and moving to quarterly payouts in 2010. Since then, it has consistently raised its dividends, making it one of the top stocks for reliable dividends. It currently pays a quarterly dividend of $2.10 per share and has a dividend yield of 1.55%, as of January 30.