UnitedHealth Group(NYSE: UNH) inventory has been one of the crucial attention-grabbing on Wall Road in the previous few weeks. Following a brutal begin to the 12 months, the healthcare supplier was the No. 1 performing inventory in your complete S&P 500 in August 2025, rising greater than 24%. It was a rare efficiency in an index that incorporates a number of high-flying know-how shares which were completely dominating the market of late.
Regardless of that nice August efficiency, UnitedHealth Group inventory nonetheless trades down 32% to date this 12 months, badly trailing the final market and being an enormous disappointment to traders. Most apparently, UnitedHealth Group stays a robust dividend inventory, paying a strong yield of two.5%. The payout can also be growing 12 months to 12 months, up 34% during the last three years.
So, right here you will have a case of a beaten-down dividend inventory that’s lastly displaying indicators of life — however continues to be far beneath its latest ranges. That means there may be nonetheless lots of room to run with this inventory. Put all of it collectively, and it creates a basic case of an amazing dividend inventory that you just’d remorse not shopping for on the dip.
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Lots went fallacious for UnitedHealth Group in 2025. It took on new Medicare Benefit sufferers, however these sufferers visited much more medical doctors than the corporate anticipated, and the added prices minimize into UnitedHealth Group’s income. Because of this, it failed to satisfy expectations for its first-quarter earnings (the corporate’s first miss because the 2008 monetary disaster) and it lowered its full-year outlook.
Then in Could, CEO Andrew Witty resigned abruptly, and the corporate pulled its annual steerage completely, citing growing medical prices. Though Chairman Stephen Hemley returned as CEO (he had stepped down in 2017), UnitedHealth Group shares plummeted additional.
On prime of that, the Division of Justice started a felony probe into the corporate for alleged Medicare fraud and billing practices inside Medicare Benefit plans that UnitedHealth Group manages. The federal government was additionally UnitedHealth Group’s acquisition of Amedisys as a part of an antitrust evaluation.
However then lots of issues began going proper. First, the corporate made some public steps to proper the ship. Throughout the second-quarter earnings name on Aug. 6, Hensley promised “elementary reorientation” of the enterprise that included premium will increase for 2026 and 2027, narrowing networks, and utilizing synthetic intelligence (AI) to assist management prices.
Then Berkshire Hathaway, led by legendary CEO Warren Buffett, introduced that the conglomerate purchased 5 million shares of UnitedHealth Group inventory. Traders watch Berkshire’s portfolio intently, and the funding was seen as an indication of confidence — though I see it as a basic Berkshire/Buffett play of investing in an amazing firm at a low worth. Berkshire’s stake was value $1.7 billion on the time of this writing. The inventory’s August beneficial properties have been all however assured.
And the momentum continues to be going robust. In a regulatory submitting, UnitedHealth Group disclosed that 78% of its Medicare Benefit targets will probably be in plans subsequent 12 months with high quality scores of a minimum of 4 stars — a goal that former CEO Witty had set, and that traders had feared the corporate wouldn’t hit.
Whereas UnitedHealth Group is again on the rise, the primary seven months of the 12 months left the inventory badly depressed. However as Berkshire Hathaway and Buffett can attest, the inventory is presently at enticing ranges, with its price-to-earnings ratio far beneath its five-year median.
As well as, UnitedHealth Group’s dividend is substantial — and rising. The corporate on Aug. 13 reaffirmed that regardless of the inventory drop, UnitedHealth would subject its dividend of $2.21 per share. The corporate’s dividend is rising rapidly, up 11 cents per share final 12 months and 34% within the final three years, whereas the present dividend yield is 2.5%.
Berkshire Hathaway and Buffett aren’t good, however they’ve wonderful monitor information and a way for selecting up high quality wounded shares on the proper time. UnitedHealth Group has a strong plan in place to extend income and cut back bills, so I anticipate it to start out assembly — or exceeding — expectations once more in 2026.
Within the meantime, I believe this is a perfect dividend inventory to choose up on the dip.
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Patrick Sanders has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Berkshire Hathaway. The Motley Idiot recommends UnitedHealth Group. The Motley Idiot has a disclosure coverage.
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