Will UnitedHealth (UNH) Dividend Hike Fail to Excite Investors?

Core Viewpoint - UnitedHealth Group Incorporated (UNH) has announced an 11.7% increase in its quarterly cash dividend, reflecting its commitment to enhancing shareholder returns while facing operational challenges due to a cyber-attack on its health services division [1][2][3]. Financial Performance - The quarterly cash dividend has been raised from $1.88 to $2.10 per share, with a dividend yield of 1.71%, surpassing the industry average of 1.39% and the S&P 500's 1.27% [1]. - At the end of Q1 2024, UNH's total debt-to-total capital ratio stood at 40.9%, better than the industry average of 43.9% [2]. - Projected operating cash flow for 2024 is between $30 billion and $31 billion, an increase from $29.1 billion in 2023, indicating strong operational profitability [2]. Challenges - The cyber-attack on Change Healthcare has negatively impacted UNH's operating cash flows in Q1 2024, leading to a revision of its net profit forecast for the full year [2][3]. - The Zacks Consensus Estimate for 2024 adjusted earnings is currently $27.57 per share, reflecting a decline of 18 cents over the past 60 days, with no upward revisions and nine downward movements [3]. - The medical care ratio is expected to deteriorate to 84.5% in 2024 from 83.2% in 2023 [3]. Stock Performance - UNH's stock has declined by 0.3% over the past year, contrasting with the industry's growth of 0.4% [4]. Market Position - UnitedHealth currently holds a Zacks Rank 4 (Sell), while other companies in the medical sector, such as Sera Prognostics, HealthEquity, and Brookdale Senior Living, have better rankings [5][6].