What UnitedHealth actually does

UnitedHealth Group is the largest US health insurer. Its UnitedHealthcare arm sells health plans to employers, individuals and government programs such as Medicare Advantage. Optum provides care delivery, pharmacy benefits, data and technology services.

How the business makes money

Insurance earns premiums, and the profit is whatever is left after paying medical claims. Optum earns fees and operates clinics and pharmacies, which is a source of growth that most insurers do not have.

The dividend story

UnitedHealth pays a quarterly dividend and has raised it each year for more than 15 years. Its yield is modest, and the payout is a small share of profit. Recently, higher medical costs and regulatory scrutiny have put pressure on the company and its shares.

What to keep an eye on

  • Medical costs. Higher claims squeeze profit.
  • Government policy. Medicare rates, rules and investigations.
  • Optum performance. Growth and integration.
  • Reputation and politics. Health care is under constant scrutiny.

Quick take

UnitedHealth is a large, growing health care company with a rising dividend, in a period of heightened cost and regulatory pressure.