We recently published a list of 12 Best Fortune 500 Dividend Stocks To Buy Right Now. In this article, we are going to take a look at where The Cigna Group (NYSE:CI)) stands against other best Fortune 500 dividend stocks to buy right now.
Compiled and published by Fortune Magazine, the Fortune 500 is an annual list that ranks the biggest US companies by revenue. In total, the Fortune 500 companies represent two-thirds of the US GDP with $18.8 trillion in revenues, $1.7 trillion in profits, and $43 trillion in market value (as of March 28, 2024), and they employ a workforce of 31 million around the globe.
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2024 proved to be a big year for large-cap stocks, as the broader US market achieved gains of nearly 25%, piggybacking on a 26% performance the year before. Large-cap stock funds, with the heaviest tilt toward growth stocks, performed the best last year, even as the market’s rally somewhat broadened from the handful of mega tech companies that have led much of the bull market.
However, the tailwinds that propelled the market to new heights are beginning to recede, as the rate of monetary policy easing slows down, long-term interests swing upward, inflation becomes sticky, and the US economy is slowing down. Moreover, the upcoming presidency of Donald Trump and his much-rumored tariffs could also herald a more volatile period for markets, as they could further fan inflation fears and put pressure on stock prices.
That said, the expected upcoming fluctuation isn’t going to be something that the mega corporations haven’t dealt with before. A 2023 report by J. P. Morgan revealed that despite the considerable volatility during the period, large-cap stocks gained around 162% between 2013 and 2023, galvanized primarily by big tech. Another 2023 report by CNBC unveiled that large US companies outperformed other investments between 2003 and 2023, with average returns of 9.3%. However, it hasn’t always been a smooth ride, as despite the stability and reliability large-cap stocks are known for, investors had to survive drops of 56.8% during the 2007-2009 bear market, 33.9% in 2020, and 25.4% in 2022.
In addition to the few tech giants regularly making headlines with their gains, large-cap dividend stocks could also be an attractive option for investors looking for a reliable, significant, and growing stream of income. According to Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, the broader US large caps are expected to post an 8% increase in dividend payments in 2025, compared to the 6.4% uptick in 2024, 5.1% gains in 2023, and the 10.8% increase witnessed in 2022.
Large-cap companies tend to have more robust balance sheets compared to their smaller counterparts, enabling them to navigate through market fluctuations more smoothly while also returning value to their shareholders. Corporations in the US have continuously grown their considerable cash stockpiles since the beginning of the pandemic, thanks to the economic resilience we have witnessed recently. A report from treasury advisory firm Carfang Group revealed that as of Q1 2024, US corporations increased their cash holdings to an all-time high of $4.11 trillion, up 12.6% from the same period in 2024 and $1.28 trillion more from their pre-pandemic levels.
Methodology
To collect data for this article, we referred to the top 50 companies among the Fortune Global Rankings. Then, we picked out 12 US-listed companies with the highest dividend yields as of January 13, 2025, and ranked them by their number of hedge fund investors according to the Insider Monkey database as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A healthcare team discussing strategies for patient advocacy programs.
The Cigna Group (NYSE:CI)
Number of Hedge Fund Holders: 66
Dividend Yield: 2.01%
Market Cap: $79 billion
The Cigna Group (NYSE:CI) is an American healthcare and insurance company, boasting more than 178 million customer relationships in over 30 countries and jurisdictions worldwide. With Cigna Healthcare and Evernorth Health Services as its two primary segments, the company has adopted a diversified business model and established itself as a leader in commercial insurance markets and pharmacy services, with specialty pharmacy being its particularly strong suit.
Despite the headwinds faced by the American health insurance sector, The Cigna Group (NYSE:CI) posted strong results in Q3 2024. The company reported a revenue of $63.7 billion, up almost 30% YoY and beating the analysts’ estimates by over $4.1 billion. The impressive uptick was primarily driven by significant growth in Evernorth Health Services, reflecting large client wins and strong specialty volume growth. Cigna’s total customer relationships rose by 12% compared to December 31, 2023, reaching 183.5 million, while its total pharmacy customers also grew by 22% to 120 million.
The Cigna Group (NYSE:CI) recently put the rumors of its highly speculated acquisition of Humana to rest and said that it was focused on buying back its shares. The company had already repurchased about $5.7 billion worth of its common stock in the first ten months of 2024, with $715 million in the month of October alone. The health insurance company also stated that it expects additional share repurchases in the fourth quarter, demonstrating its confidence in the strength and sustainable growth of its business. It is worth noting that Cigna has repurchased about $24 billion of its stock in the last four years. The firm also declared a quarterly dividend of $1.4 per share in October and has been growing its dividends for four consecutive years.
The Cigna Group (NYSE:CI) has recently come under public scrutiny after revelations by the US Federal Trade Commission that the country’s largest pharmacy benefit managers (including Cigna) have significantly marked up the prices of certain medicines, including for HIV, cancer and heart disease, at their affiliated pharmacies. However, a company spokesperson has described these findings as misleading, saying the calculations are based on a subset of medications that represent less than 2% of what its health plans spend on medications annually.
Overall, CI ranks 6th on our list of best Fortune 500 dividend stocks to buy right now. While we acknowledge the potential for CI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.