Healthcare giants sometimes pay decent dividend distributions, and UnitedHealth Group (UNH +1.82%) certainly falls into that category. In the wake of difficult circumstances, however, investors might wonder whether UnitedHealth Group's board of directors is willing and able to maintain the company's quarterly cash payouts.
As it turns out, however, UnitedHealth Group remains committed to delivering healthy dividends. It's a sign of respect for the shareholders and, perhaps, of UnitedHealth Group's resilience in challenging times.
A tough first quarter
It would be an understatement to say that 2024's first quarter wasn't an easy one for UnitedHealth Group. A cyberattack on subsidiary Change Healthcare incurred a negative impact upon UnitedHealth Group amounting to $0.74 per share. Moreover, the company sustained a charge of roughly $7 billion charge attributable to UnitedHealth Group's sale of its Brazil operations.
NYSE: UNH
Key Data Points
Meanwhile, UnitedHealth Group stock has made little progress this year so far. At least, however, there's the consolation prize of UnitedHealth Group's dividend payments -- assuming the company doesn't decide to slash the distributions during this challenging period.
It would disappoint income-focused investors, no doubt, if UnitedHealth Group were to reduce its dividend payouts. The company has a history of consistently raising its dividend every four quarters, even during the turmoil of the COVID-19 crisis.
Good news from the board
Fortunately, despite the company's recent difficulties, UnitedHealth Group's board recently chose to maintain the pattern of annual dividend raises. Specifically, UnitedHealth Group will pay a quarterly dividend of $2.10 per share, up from $1.88 per quarter previously.
Assuming a share price of around $500 and a forward annual distribution of $1.88 x 4 or $7.52, this will put UnitedHealth Group's forward annual dividend yield at $7.52/$500 or 1.5%. That's almost exactly in line with the average dividend yield for the healthcare sector. Thus, it's a reasonable payout and a possible sign that UnitedHealth Group is in fair, if not perfect, financial health.
