1 Dividend Stock Down 32% You'll Regret Not Buying on the Dip

Core Viewpoint - UnitedHealth Group has implemented a solid turnaround plan and is showing signs of recovery after a challenging start to the year, making it an attractive investment opportunity for dividend-focused investors [1][16]. Group 1: Stock Performance - UnitedHealth Group stock was the top performer in the S&P 500 in August 2025, rising over 24% despite being down 32% year-to-date [1][2]. - The stock's price-to-earnings ratio is currently significantly below its five-year median, indicating attractive valuation levels [12]. Group 2: Dividend Information - UnitedHealth Group maintains a strong dividend yield of 2.5%, with a payout that has increased by 34% over the last three years [2][14]. - The company reaffirmed its dividend of $2.21 per share despite recent stock declines, showcasing its commitment to returning value to shareholders [14]. Group 3: Challenges Faced - The company faced significant challenges in 2025, including unexpected costs from new Medicare Advantage patients, leading to a missed earnings expectation and a lowered full-year outlook [5]. - The abrupt resignation of CEO Andrew Witty and subsequent withdrawal of annual guidance due to rising medical costs further impacted stock performance [6]. Group 4: Positive Developments - Following a difficult period, UnitedHealth Group announced a "fundamental reorientation" of the business, including premium increases and cost control measures utilizing artificial intelligence [9][8]. - Berkshire Hathaway's investment of 5 million shares in UnitedHealth Group, valued at $1.7 billion, is seen as a vote of confidence in the company's recovery [10]. Group 5: Future Outlook - The company is expected to meet or exceed expectations in 2026, supported by a solid plan to increase profits and reduce expenses [16]. - A significant portion of UnitedHealth Group's Medicare Advantage plans is projected to achieve quality ratings of at least four stars, alleviating investor concerns [11].