Humana (HUM) is another health stock that hiked its dividend in the last week. Management announced a 4% increase in its quarterly check to shareholders, bringing its payout to 26 cents per share. At current levels, that means that Humana yields 1.28%.
Humana is a health insurer that covers approximately 11 million Americans. But this firm is unique in that Uncle Sam accounts for around 70% of its insurance customers. That's because the vast majority of those 11 million covered customers are on programs like Medicare Advantage, Medicaid and Tricare.Hefty reliance on government programs is a double-edged sword for firms such as Humana. On the one hand, it provides extremely reliable revenues for the firm with large expected growth in users, but on the other hand, any changes from the government could slam HUM's business model. And with Congress looking under every stone for ways to cut costs, a policy change that impacts private insurers like Humana isn't out of the question. Ideally, this firm would build its base of employer-sponsored plans to try to mitigate risks from government exposure. While HUM's dividend hike is a positive for shareholders, this stock's small yield means that it's still far from core income territory. Humana shows up on a list of Health Care Stocks Bought and Sold by Hedge Funds for the most recently reported quarter.
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