3 Reasons UnitedHealth Group Is One of the Best Dividend Stocks You Can Own

Core Viewpoint - UnitedHealth Group is presented as a strong dividend stock with significant growth potential, making it an attractive long-term investment option for dividend investors [1]. Group 1: Dividend Growth - UnitedHealth has a strong track record of increasing its dividends over the past 14 years, prioritizing dividend growth with substantial increases in recent years, resulting in nearly double the dividend income for investors over the last five years [2]. - The current dividend yield of 1.4% is considered average due to a 27% appreciation in stock price over the past year, but long-term investors will benefit from both the dividend and stock price growth [3]. Group 2: Financial Strength - UnitedHealth has sound financials with a manageable payout ratio of just over 50%, indicating minimal risk of not paying or increasing its dividend, despite a $7 billion charge from the sale of its Brazilian operations [4]. - The company reported revenue of$368 billion, a nearly 30% increase from $285 billion in 2021, and profits rose from$17 billion to over $22 billion during the same period, showcasing its growth capabilities [5]. Group 3: Growth Strategy - UnitedHealth actively pursues acquisitions to diversify its business and enhance growth prospects, including the acquisition of LHC Group and the pending acquisition of Amedisys, which are expected to contribute to earnings growth of 13% to 16% per year [6]. - The company's strategy of expanding its services, particularly in the Medicare sector, positions it well for continued growth, which could lead to more dividend increases in the future [6]. Group 4: Valuation - UnitedHealth is considered a top dividend and growth stock, trading at a forward price-to-earnings multiple of 21, slightly lower than the average of 22 for the Health Care Select Sector SPDR Fund, making it a compelling buy for long-term investors [7].