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The new King of Dividend stocks with a 10% increase

The new King of Dividend stocks with a 10% increase
Elmaz Sabovic

UnitedHealth Group (NYSE: UNH) recently announced a significant increase in its dividend payout, reaffirming its commitment to enhancing shareholder returns.

The board of directors approved an 11.70% increase in the quarterly cash dividend from $1.88 per share to $2.10, following a 13.93% increase in October 2023. The new dividend will be paid out on June 25, to shareholders of record as of June 17.

Dividend yield for UNH stock. Source: TradingView
Dividend yield for UNH stock. Source: TradingView

Based on the latest payout and the June 5 closing price, the dividend yield is approximately 1.49%, below the industry average of 1.75%.

Strong financials indicate further growth of UNH stock

The newly authorized dividend increase follows a long history of consistent dividend growth. The company has maintained dividend payments for 32 years, demonstrating financial resilience and commitment to shareholder value.

Financially, UnitedHealth Group’s market capitalization is a robust $465.25 billion, underscoring its significant presence in the healthcare industry. With a P/E ratio of 22.49, the company is valued at a premium, reflecting its strong market position and consistent performance.

Operationally, UnitedHealth Group has shown healthy revenue growth of 12.96% over the last twelve months as of Q1 2024. The company maintains a moderate level of debt and generates sufficient cash flow to cover interest payments, indicating sound financial management and operational efficiency.

Optum’s growing importance for UnitedHealthcare

UnitedHealth’s health services business, branded as Optum, is becoming increasingly valuable and is central to its diversification strategy. 

Optum’s primary growth drivers include pharmacy care services, care delivery, technology, government services, and international operations. 

With its long-term earnings growth potential, Optum provides substantial capacity for future dividend increases and drives the UNH stock price upwards.

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