The Dow Jones Industrial Average consists of 30 of the most prominent companies doing business in the United States. It's a safe bet that almost everyone in the country interacts in some way with at least one of these companies on a regular basis.

UnitedHealth Group (UNH -1.67%) operates in more than 150 countries around the world. It's the world's seventh-largest company by revenue and the largest healthcare company by revenue. it has a market cap topping $470 billion.

This dividend growth stock has been on a steady stock price climb over the past decade (up 714%), although the price leveled off in 2023. Since the start of the year, it's down about 4.8%. On the dividend front, the quarterly payout is up 490% over the past decade.

So past performance has been great for this Dow Jones stock. But is the stock still a buy for dividend-growth investors? Let's dig into UnitedHealth Group's fundamentals and valuation to get an answer.

UnitedHealth Group continues to deliver tremendous growth to shareholders

UnitedHealth Group served roughly 152 million customers between its UnitedHealthcare health insurance segment and its Optum technology services segment. This single-handedly makes it the biggest health insurer on the planet. The company's $470 billion market capitalization is $75 billion larger than its next six largest publicly traded competitors combined. The Minnesota-based company recorded $91.9 billion in total revenue during fiscal 2023's first quarter, a 14.7% year-over-year growth rate.

UnitedHealth Group's impressive double-digit percentage revenue growth was driven by two factors. First, the demand for health insurance and health services is consistently growing. That demand allows for some pricing power and the ability to raise prices at a pace close to that of rising costs. The health insurer's non-GAAP (adjusted) diluted earnings per share (EPS) rose by 14% over the year-ago period to $6.26 during the first quarter. A sharp rise in UnitedHealth Group's interest expenses is what led the company's total expenses to grow slightly faster than total revenue in the quarter. As a result, UnitedHealth Group's net margin dipped by 10 basis points to 6.4% for the quarter.

This reduced profitability couldn't be fully offset by a 1.1% lower share count due to share repurchases. That explains why the company's adjusted diluted EPS increased at a slower rate than revenue during the quarter.

Analysts forecast UnitedHealth Group's adjusted diluted EPS should grow by 13.9% annually over the next five years thanks to the favorable demographics and its industry leadership. For context, that's moderately above the healthcare-plan industry's average earnings growth outlook of 12.7%.

A doctor examines a patient.

Image source: Getty Images.

Rapid dividend growth is poised to persist

UnitedHealth Group's 1.3% dividend yield isn't particularly exciting, compared to the S&P 500 index's 1.7% yield -- at least not at the surface level. But the company's quarterly dividend per share has soared nearly sixfold in the last 10 years to the current rate of $1.65. This is why an investment in UnitedHealth Group isn't so much about starting income as it is about future income.

UNH Dividend Chart

UNH Dividend data by YCharts.

Considering that the company's dividend-payout ratio could come in below 29% in 2023, the dividend is arguably well covered. The rate is also low enough that UnitedHealth Group should have no problem executing many more years of double-digit dividend growth going forward.

A premium valuation that's within reason

UnitedHealth Group is a fundamentally promising business. Surprisingly, the valuation still appears to make it a buy for dividend-growth investors.

Sure, the stock's forward price-to-earnings (P/E) ratio of 18.1 is significantly more than the healthcare-plan industry's average forward P/E ratio of 13.7. But UnitedHealth Group's premium valuation is justified by its above-average growth prospects and undisputed status as the juggernaut of its industry.