5 Best Healthcare Dividend Stocks To Buy Now

In this article, we discuss 5 best healthcare dividend stocks to buy now. If you want to see more stocks in this selection, check out 11 Best Healthcare Dividend Stocks To Buy Now. 

5. Abbott Laboratories (NYSE:ABT)

Number of Hedge Fund Holders: 61

Dividend Yield as of October 28: 1.89%

Abbott Laboratories (NYSE:ABT) is an American healthcare firm operating through Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices segments. Abbott Laboratories (NYSE:ABT) on September 15 declared a $0.47 per share quarterly dividend. The dividend is payable on November 15 to shareholders of the company as of October 14. Abbott Laboratories (NYSE:ABT) is one of the best dividend stocks to invest in. 

On October 21, Barclays analyst Matt Miksic reiterated an Overweight rating on Abbott Laboratories (NYSE:ABT) but lowered the price target on the shares to $114 from $118. The market reaction to the Q3 results returned Abbott Laboratories (NYSE:ABT) shares to early October levels, but the performance in Diabetes, EPD, and Cardio Devices is “encouraging,” the analyst told investors. The analyst said the post-earnings selloff in the shares was overdone.

According to Insider Monkey’s Q2 data, 61 hedge funds were long Abbott Laboratories (NYSE:ABT), compared to 68 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management featured as the largest stakeholder of the company, with 9.4 million shares worth over $1 billion. 

Diamond Hill Capital made the following comment about Abbott Laboratories (NYSE:ABT) in its Q3 2022 investor letter:

“Also among our bottom contributors were health care products manufacturer Abbott Laboratories (NYSE:ABT), global pharmaceutical company Pfizer, media and technology giant Alphabet, and insurance company American International Group (AIG).

Abbott has been working through a recall of its infant formula brand Similac in the US, which has continued to pressure its share price. Although the recall will impact near-term revenues, we are not concerned about any long-term impacts. We remain optimistic about the company given it is one of the highest quality names in health care, in our view, with a talented management team that makes smart capital allocation decisions. Abbott also has leading health care and consumer franchises with a particularly strong competitive position in its medical device business. The company continues to launch innovative products in key strategic areas (such as diabetes, structural heart, and diagnostics), which should help drive not only revenue growth but margin expansion.”

4. Cigna Corporation (NYSE:CI)

Number of Hedge Fund Holders: 66

Dividend Yield as of October 28: 1.38%

Cigna Corporation (NYSE:CI) is a Connecticut-based provider of healthcare insurance and benefits management. The company’s Cigna Healthcare segment offers medical, pharmacy, behavioral health, dental, vision, and health advocacy programs. On October 26, Cigna Corporation (NYSE:CI) declared a $1.12 per share quarterly dividend, in line with previous. The dividend is payable on December 21, to shareholders of record on December 6. 

On August 8, UBS analyst Kevin Caliendo raised the price target on Cigna Corporation (NYSE:CI) to $330 from $310 and kept a Buy rating on the shares. The stock has outperformed its peers since announcing Q2 earnings given its solid results and lower medical loss ratio forecast for 2022, the analyst told investors. If COVID-19 and flu remain negligible in the second half of the year, the analyst sees “upside to 2022 estimates”.

According to Insider Monkey’s data, 66 hedge funds were bullish on Cigna Corporation (NYSE:CI) at the end of the second quarter of 2022, up from 63 funds in the prior quarter. Larry Robbins’ Glenview Capital is the largest stakeholder of the company, with more than 2 million shares worth $547 million. 

Here is what Aristotle Capital specifically said about Cigna Corporation (NYSE:CI) in its Q2 2022 investor letter:

“Cigna Corporation (NYSE:CI) contributed to performance in the second quarter, outpacing the benchmark Health Care sector return. We believe Cigna benefited from investors seeking relative “safety” in the managed care sector and the stock’s attractive valuation at just over 10 times next year’s earnings. During the quarter, Cigna reported an earnings beat due to a better-than-expected medical loss ratio.”

3. CVS Health Corporation (NYSE:CVS)

Number of Hedge Fund Holders: 65

Dividend Yield as of October 28: 2.34%

CVS Health Corporation (NYSE:CVS) is a provider of health services in the United States, operating through Health Care Benefits, Pharmacy Services, and Retail/LTC segments. On September 22, CVS Health Corporation (NYSE:CVS) declared a quarterly dividend of $0.55 per share, in line with previous. The dividend is payable on November 1. CVS Health Corporation (NYSE:CVS) is one of the best dividend stocks to buy now. 

On October 20, BofA analyst Michael Cherny maintained a Buy rating on CVS Health Corporation (NYSE:CVS) but trimmed the price target on the shares to $118 from $122. The analyst expects Q3 results to be generally steady, with well-understood short-term tailwinds and headwinds, the analyst told investors. 

According to Insider Monkey’s data, 65 hedge funds were long CVS Health Corporation (NYSE:CVS) at the conclusion of the second quarter of 2022, compared to 72 funds in the last quarter. Cliff Asness’ AQR Capital Management is the leading position holder in the company, with 3.3 million shares worth $312.7 million. 

Here is what Vltava Fund has to say about CVS Health Corporation (NYSE:CVS) in its Q3 2022 investor letter:

“CVS is a leader in the provision of healthcare services in the USA. It has three main businesses: an enormous network of pharmacies, a health insurance company, and “prescription benefit management”, which is a kind of intermediary between insurance companies and pharmacies. This is the result of large acquisitions over the past 15 years – most notably of Caremark (2007) and Aetna (2018). The markets had deemed its acquisition of health insurer Aetna too expensive (and we agree), so CVS stock then fell into disfavour for a few years.

We took advantage of this in the summer of 2020 and brought the stock into our portfolio at a time when its price was pressed down further by the coronavirus pandemic. CVS is a giant. It has revenues of USD 300 billion, making it one of the largest companies in the world. It is a relatively stable and highly profitable company with strong free cash flow. Over the past few years, CVS has focused primarily on reducing debt.

This is already much lower than it had been after the Aetna acquisition, and most of the cash is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to grow the company further. CVS trades at about 11 times annual earnings, which is a very appealing valuation given the expected future growth in profitability and overall modest cyclicality in its business.”

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 83

Dividend Yield as of October 28: 2.58%

Johnson & Johnson (NYSE:JNJ) is an American multinational healthcare firm, and it has increased its dividend in each of the past 60 years. Johnson & Johnson (NYSE:JNJ) is one of the best healthcare dividend stocks to invest in. The medical devices market is expected to skyrocket to nearly $719 billion by 2029, and Johnson & Johnson (NYSE:JNJ) is one of the biggest market players in the space. 

On October 19, Bernstein analyst Lee Hambright maintained a Market Perform rating on Johnson & Johnson (NYSE:JNJ) but lowered the price target on the shares to $190 from $194. The analyst noted that the company reported resilient Q3 results as sales increased 8.2% organically to $23.8 billion. Both sales and adjusted EPS topped consensus by 2% despite currency pressures and ongoing macroeconomic challenges, added the analyst, who also pointed out that macro pressures eased slightly.

According to Insider Monkey’s second quarter database, 83 hedge funds were bullish on Johnson & Johnson (NYSE:JNJ), with combined stakes worth $6.76 billion. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 6.5 million shares valued at $1.17 billion. 

Distillate Capital Partners LLC shared its outlook on Johnson & Johnson (NYSE:JNJ) in its Q2 2022 investor letter. Here’s what the firm said:

“Johnson & Johnson was among the 2 largest trims at around 1% each. Each stock was up 1% in the quarter compared to the 16% price decline for the S&P 500 and the positions were reduced as the valuations became somewhat less appealing, though still attractive enough to warrant inclusion.”

1. UnitedHealth Group Incorporated (NYSE:UNH)

Number of Hedge Fund Holders: 91

Dividend Yield as of October 28: 1.20%

UnitedHealth Group Incorporated (NYSE:UNH) is a Minnesota-based diversified health care company that offers consumer-oriented health benefit plans, Medicaid plans, children’s health insurance, care delivery, consumer engagement, and financial services. UnitedHealth Group Incorporated (NYSE:UNH) is one of the best dividend stocks to consider. On October 27, the company said it will offer individual and family health plans in 22 state health insurance marketplaces in 2023, up from 18 states in 2022. The open enrollment period commences from November 1, 2022 to January 15, 2023.

Deutsche Bank analyst George Hill on October 18 raised the price target on UnitedHealth Group Incorporated (NYSE:UNH) to $615 from $569 and maintained a Buy rating on the shares. The company posted strong Q3 results as membership growth remains resilient and value-based arrangements continue to grow, the analyst told investors in a research note.

According to Insider Monkey’s Q2 data, 91 hedge funds held stakes in UnitedHealth Group Incorporated (NYSE:UNH), compared to 103 funds in the last quarter. Boykin Curry’s Eagle Capital Management is the leading stakeholder of the company, with 2.87 million shares worth $1.5 billion.

In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and United Group Incorporated (NYSE:UNH) was one of them. Here is what the fund said:

“UnitedHealth Group Incorporated (NYSE:UNH) reported solid quarterly results and raised 2022 guidance modestly. Additionally, managed care is another industry that is viewed as defensive in the current environment, which helped support UnitedHealth and its peer group.”

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