I Sold UnitedHealth Shares When the Business Stumbled. Here's Why I'm Buying Again
UnitedHealth is showing signs of improvement after higher medical costs pressured earnings and margins, and Kevin Simpson is starting to buy the stock again.
TL;DR
- UnitedHealth Group has been added back to the dividend income portfolio.
- The company experienced a difficult period with deteriorating fundamentals, including higher medical costs and increased scrutiny.
- Recent quarters show evidence of business improvement, with earnings and margins starting to recover.
- The medical-care ratio improved to 86.7% in the second quarter, and UnitedHealthcare's operating margin also saw improvement.
- The stock offers a dividend yield of approximately 2.5% and has increased its dividend for 16 consecutive years.
- The stock is trading at about 18 times forward earnings and is approximately 20% below its 52-week high.