7. UnitedHealth Group Incorporated (NYSE:UNH)
5-Year Average Dividend Growth: 15.41%
Consecutive Years of Dividend Growth: 15
UnitedHealth Group Incorporated (NYSE:UNH) is an American multinational health insurance and services company. On August 7, the company declared a quarterly dividend of $2.10 per share, having raised it by 11.7% in June this year. This marked the company’s 15th consecutive year of dividend growth, which makes UNH one of the best dividend stocks for steady growth. Its five-year average annual dividend growth rate comes in at 15.4%. The stock’s dividend yield on August 23 came in at 1.44%.
Over the past decade, UnitedHealth Group Incorporated (NYSE:UNH) has proven to be a remarkable investment, delivering nearly 600% returns and consistently outperforming the market, offering investors impressive gains. This performance highlights that investing in a leading healthcare company can be a reliable strategy for generating robust, consistent returns, especially as spending in the sector is expected to continue increasing in the future. UnitedHealth Group Incorporated (NYSE:UNH) effectively draws investors by implementing its expansion strategies. In recent years, it has broadened its reach into related areas, such as home healthcare and analytics, to diversify its operations further. These efforts aim to deliver greater value to its partners and patients.
Andvari Associates highlighted the strengths of UnitedHealth Group Incorporated (NYSE:UNH) in its Q2 2024 investor letter. Here is what the firm wrote:
“UnitedHealth Group Incorporated (NYSE:UNH) is one of the largest providers and distributors of services in the $5 trillion U.S. healthcare market. The company provides services to employers, individuals, and those eligible for Medicare and Medicaid. United’s Optum segment provides pharmacy benefit services and a slate of other insights and services to the major players in the healthcare space: physicians, hospitals, government agencies, and life science companies.
This is a company that provides essential services and has a strong wind at its back. Over two million people are enrolling in Medicare and Medicare Advantage every year. With the increase of healthcare spending every year, the value of the services and insights provided by Optum will only increase. United is a solid business with a high teens returns on its capital. After reinvesting in its businesses, United will likely return $16 billion in 2024 in the form of dividends and share repurchases off a revenue base of ~$380 billion.”
These initiatives have significantly fueled UnitedHealth Group Incorporated’s (NYSE:UNH) growth over time. Since 2011, UnitedHealth’s revenue has more than tripled, rising from just over $101 billion to nearly $372 billion by 2023. In the second quarter of 2024, the company reported revenue of $98.8 billion, up 6.41% from the same period last year. Its operating cash flow amounted to $6.7 billion, representing 1.5 times the net income.
The number of hedge funds tracked by Insider Monkey owning stakes in UnitedHealth Group Incorporated (NYSE:UNH) grew to 114 at the end of Q2 2024, from 104 in the previous quarter. These stakes have a total value of over $12.5 billion.
