Tag: UNH

Investment Outlook on Healthcare Plan Stocks Amid Market Turbulence

by Fred Fuld III

The healthcare sector, particularly managed‑care insurers, has been under pressure recently, driven by rising medical costs, regulatory scrutiny, earnings disappointments, and reputational challenges. Many of these companies’ stocks have significantly lagged the broader market, and investors are grappling with whether these sectors present contrarian value opportunities or structural pitfalls.

A high‑profile case is UnitedHealth (UNH): after a December 2024 incident—the murder of its insurance‑division CEO Brian Thompson—plus unexpected medical cost overruns and a DOJ investigation, the company endured a painful sell‑off. Its stock plunged by around half year‑to‑date earlier in 2025.

Yet, in a classic “buy the dip” moment, Warren Buffett’s Berkshire Hathaway added over 5 million UNH shares (worth approximately $1.6 billion) by end of June. This triggered a “Buffett Bounce,” with UNH shares rising substantially upon the announcement, Analysts now see UNH as undervalued, with forward P/E at or below historical norms, a decent dividend yield (~3%), and a consensus Buy rating with upside potential above 20%.

This recovery has pulled other managed‑care stocks—including Elevance Health (ELV)—into renewed investor focus, with many seeing longer‑term upside as the sector’s economic fundamentals reassert themselves.

Stock Profiles

UnitedHealth (UNH)

Once a Wall‑Street favorite for consistent profits and dominant scale, UNH now contends with broad operational headwinds. It slashed its 2025 earnings guidance to around $16 per share (vs. ~$20.64 expectation and prior guidance of $30+), due to soaring costs, Medicare reimbursement challenges, and regulatory and legal complications. The company faces intensive scrutiny, including criminal probes related to Medicare billing and claims practices.

However, for value investors, the valuation reset is significant. With Buffett’s entry and positive analyst sentiment, some see UNH as a turnaround play—not without risks, but potentially rewarding for those betting on operational reforms under returning CEO Stephen Hemsley and cost containment initiatives.

The stock, with a market cap of $275 billion, trades at 13 times trailing earnings and 17 times forward earnings. It carries a favorable Price to Sales Ratio of 0.65, and provides a yield of 2.8%.

Cigna (CI)

Two months ago, Cigna was trading near $297, with relatively muted volatility compared to peers. Cigna aligns with the broader managed‑care sector and likely shares similar cost and regulatory pressures. Its profile suggests steadiness and defensive appeal, though without the explosive risk/reward of UNH at current levels.

This $79 billion market cap stock has a trailing price to earnings ratio of 16 and a forward P/E of 9. The price to sales ratio is an excellent 0.30. The stock sports a yield of about 2.5%.

CVS Health (CVS)

CVS encompasses pharmacy chains, PBM services, and Aetna’s insurance plans. Although CVS’s integrated model offers resilience, its exposure to Medicare Advantage and cost pressures mirrors peers. Reports indicate investor focus on whether CVS can sustain momentum under its current management amid sector‑wide headwinds.

The stock has a market cap of $96 billion, a trailing P/E of 19, and a forward P/E of 9.6.The price sales ratio is a superior 0.23, with a fairly high yield of 3.9%.

Elevance Health (ELV)

Elevance Health was formerly Anthem. Analysts hold a bullish consensus “Buy” rating, with a 12‑month price target near $412—implying about 33% upside.

Elevance’s valuation appears attractive, with forward P/E near 10, following a 13 trailing P/E, and dividend yield around 2.2%. Though it has trended down from a 52‑week high over $567, the volatility is modest and relative fundamentals solid. Market forecasts place it as a stable performer in managed‑care. The market cap is $69.7 billion.

Conclusion

The current landscape offers a mix of risks and opportunities across healthcare plan stocks, the following which all have dividend yields above 2%:

  • UnitedHealth (UNH) represents high-risk, high-reward territory. The battered valuation, combined with Buffett’s backing and potential for operational recovery, may appeal to contrarian, value-minded investors—but only for those comfortable with regulatory and reputational risks.
  • Elevance Health (ELV) strikes a compelling balance between stability, valuation, and growth potential. With solid fundamentals and moderate upside, it’s positioned for cautious optimism.
  • Cigna (CI) and CVS Health (CVS) are less volatile and potentially more defensively oriented—though sector-wide headwinds remain a concern.

For investors evaluating this sector, the decision likely hinges on risk tolerance and time horizon: are you looking for a possible rebound champion (UNH), a strong core holding (ELV), or stable, less dramatic exposure (CI) and (CVS)? Investors attracted to contrarian, value-oriented plays may find the sector appealing right now. However, the path forward depends on successful cost management, legal clarity, and renewed growth momentum.

Disclosure: Author didn’t own any of the above at the time the article was written. No investments are expressed or implied.

Stocks Going Ex Dividend in March 2024

The following is a short list of some of the many stocks going ex-dividend during the next month, which can be helpful for traders and investors interested in the stock trading technique known as “Buying Dividends” or “Dividend Capture.” This strategy involves purchasing stocks before the ex dividend date and selling them shortly after the ex-date at a similar price, while still being eligible to receive the dividend payment.

Although this technique generally proves effective in bull markets and flat or choppy markets, it is advisable to exercise caution and consider avoiding this strategy during bear markets. To qualify for the dividend, it is necessary to buy the stock before the ex-dividend date and refrain from selling it until on or after the ex-date.

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date can be delayed by up to two months after the ex-date.

For investors seeking a comprehensive list of stocks going ex-dividend in the near future, WallStreetNewsNetwork.com has compiled a downloadable list containing numerous dividend-paying companies. Here are a few examples showcasing the stock symbol, ex-dividend date, periodic dividend amount, and annual yield.

H&R Block, Inc. (HRB)3/4/20240.322.61%
The Kraft Heinz Company (KHC)3/7/20240.404.45%
UnitedHealth Group Incorporated (UNH)3/8/20241.881.43%
Coca-Cola Company (KO)3/14/20240.4853.20%
Mercer International Inc. (MERC)3/26/20240.0753.53%
Pacific Gas & Electric Co. (PCG)3/27/20240.010.12%
State Street Corporation (STT)3/28/20240.693.79%

To access the entire list of over 100 ex-dividend stocks, subscribers will receive an email in the next couple days with the full list. If you are not already a subscriber, you can sign up using the provided signup box below. Don’t miss out on this valuable information, and the best part is that it’s free!

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Declaration date: This refers to the day when a company announces its intention to distribute a dividend in the future.
Ex-dividend date: On this day, if you purchase the stock, you would not be eligible to receive the upcoming dividend. It is also the first day on which a shareholder can sell their shares and still receive the dividend.
Record date: This marks the day when you must be recorded on the company’s books as a shareholder to qualify for the dividend. Typically, the ex-dividend date is set two business days prior to the record date.
Payment date: This is the day on which the dividend payment is actually made to the eligible shareholders. It’s important to note that the payment date can be as long as two months after the ex-date.

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

In conclusion, being aware of the stocks going ex-dividend can be advantageous for traders and investors employing the “Buying Dividends” strategy. WallStreetNewsNetwork.com provides a convenient resource to access a comprehensive list of such stocks, allowing individuals to plan their investment decisions effectively. Remember to stay informed and consider market conditions before employing any investment strategy.

Disclosure: Author did not own any of the above at the time the article was written.