If you want steady income from your investments, dividend stocks are a smart choice. They pay you cash regularly, whether the economy is strong or weak. This income can help retirees or allow younger investors to buy more shares.
One stock to consider is UnitedHealth Group (NYSE: UNH), which currently offers a 2.8% dividend yield. To earn $1,000 a year from UnitedHealth dividends, you need to own about 114 shares. Here’s how that number is calculated: divide $1,000 by the recent annual dividend of $8.84 per share, which equals roughly 114 shares.
At UnitedHealth’s current price of about $308 per share, buying 114 shares would cost around $35,112 — a significant investment. If that’s too much, buying fewer shares still generates some income.
For example, 32 shares cost just under $10,000 and would pay about $283 annually in dividends. Since UnitedHealth has been raising its dividend — from $4.32 in 2019 to $6.60 in 2022, and now $8.84 — your income could grow over time, possibly reaching $1,000 eventually with fewer shares.
However, deciding whether to invest in UnitedHealth requires weighing pros and cons. The company has faced recent challenges, including negative publicity after the murder of its CEO last year.
Additionally, healthcare policy changes in Washington may affect its business, especially since UnitedHealth owns Optum Rx, a pharmacy benefits manager (PBM) that could be impacted by regulatory shifts.
On the positive side, UnitedHealth’s stock is near a five-year low, trading at a forward price-to-earnings ratio of 14, well below its five-year average of 19. Many investors believe these issues are temporary. The company remains a giant in healthcare, generating billions in free cash flow.
In summary, while UnitedHealth offers a solid dividend and potential for growth, investors should consider the risks and market conditions before buying shares.
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