It's important that dividend-growth investors strike a balance between immediate income and future income.

While quality, high-yielding dividend stocks can provide income to supplement an investor in retirement, they can't always keep up with inflation. That's because yield and growth are typically inversely correlated. All else being equal, a low yield translates into higher dividend-growth potential while a high yield generally means lower dividend growth.

One stock that fits into the former category is the health insurer Anthem (ELV -2.76%). Let's take a look at four reasons the stock is a buy for dividend investors looking to boost the growth profile of their portfolios.

1. The business continued its double-digit growth

Anthem reported impressive results for the period ended Dec. 31, 2021.  Operating revenue totaled $136.9 billion during the year, which equates to a 13.4% growth rate over the year-ago period. What was behind the health insurer's healthy growth? The answer is twofold.

First, Anthem's medical enrollment edged 5.7% higher year over year to 45.4 million at the end of 2021. This was primarily driven by an increase in its Medicaid and Medicare Advantage businesses. The remainder of the enrollment growth was the result of businesses enrolling employees into its commercial plans. 

The second reason is the company's pricing power given the necessity of health insurance. And with accelerating inflation, Anthem was able to pass on price hikes to its membership base.

Anthem's non-GAAP adjusted, diluted earnings per share jumped 15.6% higher year over year in 2021 to $25.98. So, how did the company pull off such solid earnings growth for a large-cap health insurer?

Aside from Anthem's higher operating revenue base, there was one contributing factor. Thanks to its share repurchase program, the stock's weighted average diluted share count fell 2.9% year over year to 246.8 million in 2021. 

A person shops at a pharmacy.

Image source: Getty Images.

2. A big fish in a growing pond

Anthem's 2021 was phenomenal. But the earnings growth forecast for the next five years from analysts is especially encouraging. Analysts are expecting the stock to deliver 12.9% annual earnings growth, which is almost in line with the growth posted in 2021. What is the reasoning behind this optimistic outlook for the health insurer?

As a result of rising medical care costs and increasing rates of chronic medical conditions, the global health insurance market will likely continue to grow over the foreseeable future. This is why analysts are predicting that the global health insurance market will compound at a 4.6% annual rate from $2.8 trillion in 2020 to $3.9 trillion by 2027. 

As it is the third-largest health insurer in the world by market capitalization, behind UnitedHealth Group and CVS Health, few companies will benefit as much as Anthem from this industry growth. 

3. Strong dividend growth should persist

Anthem's appeal to dividend growth investors doesn't stop at its promising earnings growth prospects.

The stock's dividend payout ratio was just 17.4% in 2021. This leaves Anthem the flexibility to take a balanced approach toward share repurchases, debt repayment, and acquisitions to generate adjusted diluted EPS growth moving forward. This is why I believe Anthem will build on its 12-year dividend growth streak with raises similar to its most recent 13.3% hike.

Anthem's 1% dividend yield may not be particularly attractive to income investors. But the low-double-digit dividend growth makes up for that in my opinion.

4. The stock is a bargain for its quality

Anthem is a fundamentally sound stock. And the cherry on top is that investors can buy Anthem at an enticing valuation.

Anthem's forward price-to-earnings ratio of 15.2 is slightly below the healthcare-plan industry average of 16.1. Better yet, Anthem's 12.9% annual earnings growth outlook is slightly ahead of the industry average of 12.8%. Simply put, Anthem is an above-average stock trading at a below-average valuation. That's what makes it an intriguing stock to buy for dividend-growth investors.