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UnitedHealth Is Healthy For Your Dividend Portfolio

UnitedHealth pays 1.45% in yield which we think is a bit low compared to some other stocks we could buy but the payout is very safe and being grown aggressively. The payout ratio is running about 30% of earnings with earnings outpacing the consensus estimate and there is a history of aggressive growth. The company has been raising the dividend annually for the past 12 years with a 20% CAGR over the last five so we do expect large distribution increases to continue. The balance sheet is rather strong, too, with some debt on it but also a high level of cash, a very low leverage ratio, and ample coverage and free cash flow. If anything, investors might expect the pace of dividend increases to slow but we don't see any evidence of that right now.

The Technical Outlook: UnitedHealth Is On Breakout Alert

Shares of UnitedHealth jumped more than 5% at the open to create a large window and open near the top of the recent consolidation range. Price action moved up to set a new high but, during mid-day action at least, move lower to confirm resistance at that level. The move is accompanied by bullish indicators and positive news so we do expect to see price action continue higher. The caveat is that, at least for now, there is a chance of a shooting star candle being formed and that could cap games in the near to midterm. Assuming price action is able to consolidate at this level and establish a base, we would expect to see it move up to new all-time high territory and to the range of $460.