3. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 112
5-Year Average Payout Ratio: 33.15%
UnitedHealth Group Incorporated (NYSE:UNH) is a Minnesota-based health insurance company. It boasts a solid dividend track record. It began distributing annual dividends in 1990 and transitioned to quarterly payments in 2010. Since that shift, the company has consistently increased its dividend each year, earning it a spot as one of the best dividend stocks on our list. Its quarterly dividend comes in at $2.10 per share for a dividend yield of 1.55%, as of January 13.
UnitedHealth Group Incorporated (NYSE:UNH) has surged by over 4% in the past 12 months. In the third quarter of 2024, the company delivered strong earnings, with revenue reaching $100.8 billion, a 9.16% increase compared to the same period last year. Its domestic commercial services saw significant growth, gaining 2.4 million new customers this year. For the full year 2024, net earnings are projected to be between $15.50 and $15.75 per share, taking into account the sale of its South American operations earlier in the year and the impact of the Change Healthcare cyberattack.
PGIM Jennison Health Sciences Fund highlighted UNH in its Q3 2024 investor letter. Here is what the firm has to say:
“UnitedHealth Group Incorporated (NYSE:UNH) is the largest health care services company in the U.S. The company offers healthcare benefits to Americans who receive insurance from employers or government-based programs such as Medicare and Medicaid. Half of the company is represented from non-benefits businesses under the Optum umbrella. This includes a technology business that helps hospitals, pharma companies, and other payors. It also includes a fast-growing provider business where Optum owns surgery centers and urgent care centers. The company’s primary care business continues to grow and it’s participating in the emerging trend of primary care taking on risk and acting like an insurance company. Finally, UnitedHealth owns a drug benefits manager. The company continues to have high quality and well-positioned businesses. In the first half of ’24, UnitedHealth has beat earnings expectations and confirmed full year financial guidance. While medical costs have pressured results, the company has cut a lot of spending to support earnings. We have also seen volatility in the stock related to political dynamics; a view that Republicans are better for this group helped support the stock in June and July and a moderation in policy views from the democratic nominee also helped support the stock. Future catalysts for the company and the stock include potentially stabilizing cost trend, a calmer political environment, and visibility into the company’s long-term earnings growth targets.”
According to Insider Monkey’s database of Q3 2024, 112 hedge funds owned stakes in UnitedHealth Group Incorporated (NYSE:UNH), compared with 114 in the preceding quarter. These stakes are valued at over $15 billion in total.