5. UnitedHealth Group Incorporated (NYSE:UNH)
Upside Potential as of December 13: 21.4%
UnitedHealth Group Incorporated (NYSE:UNH) ranks fifth on our list of the best dividend stocks. According to analysts, the American multinational healthcare and insurance stock has an upside potential of 21.4%. This analyst’s response might catch investors off guard, given the company’s recent difficulties following the tragic murder of its CEO, Brian Thompson. The long-term implications of this event for the health insurance sector remain unclear. For now, the situation has drawn considerable national attention, with many investors seemingly surprised by the intensity of the public backlash against the company. The stock has fallen by over 2.3% since the start of 2024.
That said, UnitedHealth Group Incorporated (NYSE:UNH) generated strong earnings in the third quarter of 2024. The revenue of $100.8 billion grew by 9.16% from the same period last year. The company’s commercial domestic offerings have seen significant growth, adding 2.4 million consumers so far this year. Its projected net earnings for the full year 2024, estimated at $15.50 to $15.75 per share, take into account the divestiture of its South American operations during the first half of the year, as well as the impacts of the Change Healthcare cyberattack.
PGIM Jennison Health Sciences Fund mentioned 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.”
UnitedHealth Group Incorporated (NYSE:UNH) has raised its payouts for 15 years in a row. The company currently pays a quarterly dividend of $2.10 per share and has a dividend yield of 1.59%, as of December 13.
As per Insider Monkey’s database of Q3 2024, 112 funds held stakes in UnitedHealth Group Incorporated (NYSE:UNH), down from 114 in the previous quarter. These stakes are worth more than $15 billion in total.