1. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 145
Dividend Yield as of May 21: 2.31%
Topping our list of the Best Dividend Stocks is UnitedHealth Group Incorporated (NYSE:UNH). It is a health care and well-being company with team members in two distinct and complementary businesses – its insurance wing, UnitedHealthcare, and its health services segment, Optum.
On May 20, Mizuho boosted the firm’s price target on UnitedHealth Group Incorporated (NYSE:UNH) from $410 to $440, while maintaining an ‘Outperform’ rating on the shares. The revised target represents an upside of 15% from the current share price. According to Mizuho, the managed care group delivered strong results in the recent Q1 earnings season. The firm bumped up its estimate on UNH due to the lower risk of negative medical loss ratio changes through the end of this year.
UnitedHealth Group Incorporated (NYSE:UNH) comfortably exceeded estimates in its Q1 results reported last month. The company kept costs in check and received improved government payments for its health insurance services. Moreover, it raised its full-year 2026 adjusted earnings outlook to more than $18.25 per share, compared to its prior forecast of more than $17.75.
Eagle Capital Management, an investment management company, stated the following regarding UnitedHealth Group Incorporated (NYSE:UNH) in its Q1 2026 investor letter:
“UnitedHealth Group Incorporated (NYSE:UNH) and Humana, two of the leading providers of managed care, have significant scale advantages in a consolidated industry that outgrows the overall economy. The two companies have struggled over the past few years as Medicare Advantage went through a downcycle of cost/price squeeze. We believe conditions have bottomed and that we are transitioning to a multi-year improvement in margins and returns. Actions by each to reduce costs and implement AI through their businesses are incremental tailwinds. At our weighted position, we expect annual EPS growth exceeding 20%.”
While we acknowledge the potential of UNH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than UNH and that has 100x upside potential, check out our report about the cheapest AI stock.
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