12 Best Fortune 500 Stocks To Buy According to Hedge Funds

5. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 150

UnitedHealth Group Incorporated (NYSE:UNH) is a health care and well-being company with team members in two distinct and complementary businesses – its insurance wing UnitedHealthcare and its health services segment Optum.

UnitedHealth Group Incorporated (NYSE:UNH) had a strong 2024 with a revenue of over $400 billion (up 8% YoY) and adjusted earnings per share of $27.66, well within the outlook ranges it set out over a year ago. Moreover, the company grew its domestic customer base served by the UnitedHealthcare business by 2.1 million, while its cohort of Optum patients increased by 600,000. UNH maintains a robust balance sheet and generated an operating cash flow of $24.2 billion last year, 1.6 times its net income. The company also remained committed to its shareholders and returned over $16 billion to shareholders through dividends and share repurchases in 2024.

UnitedHealth Group Incorporated (NYSE:UNH) has consistently paid dividends since 1990, switching from annual to quarterly dividends in 2010, and consistently increasing its dividend ever since. The healthcare company offers a quarterly dividend of $2.10 per share and is included among the 14 Best Large Cap Dividend Growth Stocks to Buy Now.

Barons Funds stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q4 2024 investor letter:

“Shares of UnitedHealth Group Incorporated (NYSE:UNH), the largest health care company by revenue, were volatile in the quarter. Quarterly medical cost trends ran higher than expected, the high end of quarterly guidance was cut, and the preliminary 2025 outlook missed consensus. The Republican November election sweep drove shares up, as Republicans have historically been more supportive of managed care, which bodes especially well for Medicare Advantage, the industry’s main growth engine. In December, UnitedHealth’s CEO was shot and killed, and the subsequent outpouring of public anger over the managed care industry’s history of claims denials sparked concern about the industry’s ability to control health care spend. The specter of pharmacy benefit manager (PBM) legislation was an additional pressure along with multiple press pieces questioning managed care practices and profit drivers. Longer term, we believe managed care will remain embedded in the U.S. health care system and UnitedHealth, as the largest, best managed, and most disciplined and forward-thinking company in the industry, will continue to grow.”