#5: UnitedHealth Group
Dividend Yield: 1.5%
Payout Ratio: 14%
YTD Performance: +11%
Welcome to the Dow, UnitedHealth!
Now, where the heck is our money?
That’s right. Just more than a month ago, UnitedHealth Group (NYSE:UNH) became the lone health insurance component of the Dow Jones Industrial Average — replacing the now split-apart Kraft — and it immediately settled in with the bad crowd. UNH sports one of the worst dividends in the index, and its miserly payout ratio would make Scrooge McDuck blush.
Don’t hate on UnitedHealth too much, though.
It only recently got into the business of frequent payouts, switching from a 3-cent annual dividend to quarterly distributions in 2010, which should end up totaling 79 cents by year’s end. In just a scant three years, UNH has boosted its payout more than 60% — not bad.
Also, you have to love that UnitedHealth is playing in as hopeful a sector as healthcare, which should benefit from demographic trends playing out both in the U.S. and abroad.
So UNH definitely looks like a defensive investment for the long run; investors just have to hope dividend growth will come with time.