Is UnitedHealth Still a Good Dividend Stock?

Core Viewpoint - UnitedHealth Group has faced significant challenges in 2025, with a 28% decline in stock price and rising costs impacting earnings, yet it maintains a strong health insurance business and a reliable dividend growth history [4][5][11]. Financial Performance - UnitedHealth generated $21.3 billion in profit over the trailing 12 months, with a payout ratio of 37%, indicating room for continued dividend payments and potential increases [5]. - The stock is currently trading at a price-to-earnings multiple of 15, providing a margin of safety for investors [14]. Dividend Information - The company raised its quarterly dividend by $0.11 to $2.21, reflecting a more than 5% increase, which is a key factor for income-focused investors [9]. - The current dividend yield stands at 2.5%, significantly higher than the S&P 500 average of less than 1.2% [11]. Cost and Utilization Trends - Rising costs are attributed to inflation and increased utilization rates as healthcare procedures return to pre-pandemic levels, with the medical care ratio rising to 89.4% from 82.5% in 2019 [6]. - The company is focused on cost management, which is expected to lower the medical care ratio over time [6]. Market Position - UnitedHealth plays a vital role in the healthcare industry, insuring over 50 million people, and is considered a strong long-term investment despite current challenges [13].