We recently published a list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. Since UnitedHealth Group Inc (NYSE:UNH) ranks 1st in the list, it deserves a deeper look.
Billionaire Paul Tudor Jones recently made headlines after he participated in the Robin Hood foundation’s fundraising event dressed as Neo from the movie “The Matrix.” The event raised $68.5 million. The billionaire, who founded Tudor Investment Corporation in 1980, couldn’t help himself but talk about investing during the event, and highlighted the importance of “Warren Buffett-style compounding.”
“Somewhere, somehow the multiplicative power of compound put you in this seat,” Tudor Jones said.
Paul Tudor Jones’ Recession Prediction
During an interview last year, the billionaire had predicted that a recession was expected to start in the first quarter of 2024. He said at the time that the US was in its “weakest position” since World War II. However, the market rally fueled by AI proved the prediction wrong. Earlier this year, Jones said in another interview that the financial markets represent people’s ideas and what they make of the economic situation. Paul Tudor Jones said that there’s a chance the stock market would be “here or lower” in the next five to ten years. However, the billionaire also said it’s possible that the markets would go higher from here if the next President of the US devises a better “policy response” next year.
READ NEXT: Billionaire Cooperman’s Top Dividend Picks and Analysts Are Upgrading These AI Stocks
He’s been vocal about AI lately and sharing his thoughts about the impact of technology on our society. He thinks AI could be the “knight on the horse that rides and saves us.”
But AI-related threats worry Paul Tudor Jones. In an interview in January he referred to a survey where close to 3,000 AI experts were asked whether they believe AI would end humanity. According to Jones, a whopping 58% of the experts said yes. The billionaire said US policymakers will have to decide how to tackle this problem. Jones believes AI is growing at an “unbridled pace” since there’s so much money to be made in the domain but the biggest problem for policymakers would be to balance the benefits and threats of AI to make it sustainable.
For this article we scanned billionaire Paul Tudor Jones’ Q1 portfolio and chose his top dividend stock picks. Why are we interested in 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).
UnitedHealth Group Inc (NYSE:UNH)
Billionaire Paul Tudor Jones Q1’2024 Stake: $67,706,126
UnitedHealth Group Inc (NYSE:UNH) is one of the most famous dividend stocks in the market right now, as the health insurance giant has increased its payout every year since 1990. Billionaire Paul Tudor Jones increased his hold in Unitedhealth Group Inc (NYSE:UNH) by 167% in the March quarter, ending the period with a $68 million stake in Unitedhealth Group Inc (NYSE:UNH). Analysts expect Unitedhealth Group Inc’s (NYSE:UNH) EPS to expand by about 10.5% to $27.75 by the end of 2024. The global health insurance industry is set to grow at a CAGR of 6.2% from 2024 through 2032. This growth would bode well for industry leaders like UNH.
Last month Bank of America Securities analyst Kevin Fischbeck reiterated a Buy rating on UnitedHealth Group Incorporated (NYSE:UNH) with a price target of $675.00. The analyst highlighted UnitedHealth’s efforts to grow its long-term EPS to 13-16%, strong value-based care model, and adaptable business strategy.
UnitedHealth revenue in the first quarter increased by 8.6% year-over-year to $99.8 billion. Its net loss per share of $1.53 was due to the $7.1 billion charge from the sale of its Brazil operations. In 2025, the company’s adjusted EPS is expected to jump 12.3% and by 13.2% in 2026.The company’s forward P/E of 17 is still lower than its 10-year average P/E of 20.2.
Baron Health Care Fund stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its first quarter 2024 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) is a leading health insurance company that operates across four segments: United Healthcare, Optum Health, OptumInsight, and OptumRX. Shares fell alongside other managed care organizations (MCOs) due to patient utilization of Medicare Advantage (MA) that was higher than consensus forecasts, raising concerns that MCOs had mispriced 2024 bids and could suffer margin compression as a result. In addition, the industry is facing headwinds from MA reimbursement cuts and Star Rating changes. While management said higher cost trends are mostly transitory and reflected in its bidding, and 2024 guidance was roughly in line with consensus, investors took a more cautious wait-and-see approach. We believe UnitedHealth should remain a core portfolio holding, as it is a way to play positive demographic, population health, and value-based reimbursement trends. Despite its size, we think the company should be able to grow earnings consistent with its 13% to 16% long-term EPS annual target, the fastest among major MCOs.”
Overall, UnitedHealth Group Inc (NYSE:UNH) ranks 1st in Insider Monkey’s list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. You can visit Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones to see other stock picks of Billionaire Paul Tudor Jones. While we acknowledge the potential of UnitedHealth Group Inc (NYSE:UNH), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UnitedHealth Group Inc (NYSE:UNH) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
