13 Best Healthcare Dividend Stocks to Invest in

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1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 150

An American health insurance company, UnitedHealth Group Incorporated (NYSE:UNH) offers a wide range of related services and products. Analysts noted that the company successfully lowered its operating cost ratio, largely due to strategic portfolio initiatives, which bodes well for future profitability. For fiscal year 2024, the operating cost ratio improved to 13.2%, down from 14.7% in 2023.

UnitedHealth Group Incorporated (NYSE:UNH) benefits from a diversified business model that spans health insurance, pharmacy benefits management, and healthcare services, positioning it for long-term growth. The integration across these segments enhances cross-selling opportunities and enables more efficient care delivery.

The company delivered strong fiscal year 2024 results, surpassing investor expectations. Revenue grew 8% to $400 billion, supported by broad-based expansion across its service offerings. Operating earnings totaled $32.3 billion, but after adjusting for costs related to a cyberattack and challenges in South America, adjusted operating earnings reached $34.4 billion.

UnitedHealth Group Incorporated (NYSE:UNH) also reported healthy cash flow, in line with investor expectations. It generated $24.2 billion in operating cash flow, amounting to 1.6 times its net income. Throughout 2024, the company returned over $16 billion to shareholders through dividends and stock buybacks. In the fourth quarter, the return on equity stood at 23.7%, reflecting strong earnings and effective capital management. The company currently offers a quarterly dividend of $2.10 per share and has a dividend yield of 1.65%, as of March 20. It has been paying regular quarterly dividends to shareholders since 2010.

Overall, UnitedHealth Group Incorporated (NYSE:UNH) ranks first on our list of the best dividend stocks in the healthcare sector. While we acknowledge the potential of UNH as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than UNH but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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