UnitedHealth Group (UNH) Stock Gains on Dividend Increase

NEW YORK (TheStreet) -- UnitedHealth Group (UNH) shares are up 0.62% to $118.54 in early market trading on Wednesday after the diversified health and well being company raised its quarterly dividend by 33% today.

The company is raising its quarterly dividend to 50 cents per share from 37.5 cents per share.

The dividend is scheduled to be paid June 24 to shareholders of record on June 15.

"We entered 2015 with strong momentum and expect to continue to grow and diversify throughout the year, into 2016 and beyond. Our growth is grounded in our drive to perform better every day on behalf of the people we are privileged to serve while continuing to improve the health care system itself," said CEO David S. Wichmann.

Despite today's news, analyst Gary Morrow of TheStreet believes that UnitedHealth is poised for a sharp pullback.

You can read Morrow's take on the company's prospects here

TheStreet Ratings team rates UNITEDHEALTH GROUP INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNITEDHEALTH GROUP INC (UNH) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 32.72% and other important driving factors, this stock has surged by 52.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, UNH should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • UNITEDHEALTH GROUP INC has improved earnings per share by 32.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITEDHEALTH GROUP INC increased its bottom line by earning $5.70 versus $5.50 in the prior year. This year, the market expects an improvement in earnings ($6.26 versus $5.70).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Health Care Providers & Services industry average. The net income increased by 28.6% when compared to the same quarter one year prior, rising from $1,099.00 million to $1,413.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.2%. Since the same quarter one year prior, revenues rose by 12.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Health Care Providers & Services industry and the overall market, UNITEDHEALTH GROUP INC's return on equity exceeds that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: UNH Ratings Report

More from Markets

Canopy Growth Lets Down Eager Pot Investors; PayPal Keeps Dominating -- ICYMI

Canopy Growth Lets Down Eager Pot Investors; PayPal Keeps Dominating -- ICYMI

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Dow, S&P 500 and Nasdaq Tumble After Trump Calls Off North Korea Summit

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

3 Must Reads on the Market From TheStreet's Top Columnists

3 Must Reads on the Market From TheStreet's Top Columnists

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers

Automakers Slump as Trump Tariffs Threaten Both Manufacturers and Consumers