UnitedHealth Group’s quarterly dividend payment
UnitedHealth Group’s (UNH) quarterly dividends will be paid on March 20, 2018. On February 14, 2018, the company announced the authorization of a quarterly dividend payment of $0.75 per share to shareholders of record on March 9, 2018, payable on March 20, 2018. The dividend amount is the same as previous quarters and reflects an increase of ~20% compared to the quarterly dividend payment of $0.15 per share paid in the previous fiscal year. The indicated annual dividend rate for fiscal 2018 is $3 per share.
The company has been paying increasing dividends over the last eight years. Its average annual dividend increase over the last three years is 27%.
As of March 15, 2018, UnitedHealth Group has a dividend payout ratio of ~29.6%. It has a dividend yield of ~1.3. Peers Cigna (CI), Anthem (ANTM), and Aetna (AET) have dividend yields of 0.02, 1.3, and 1.1, respectively.
UnitedHealth Group’s capital allocation strategy
UnitedHealth Group has a consistent capital allocation strategy that focuses on maintaining consistent investments and creating value for shareholders through steadily increasing dividends aimed at reaching the market rate dividend payout. The company has a long-term, debt-to-total capital ratio target of ~40%. In 2017, it spent ~$2.8 billion on dividend payments. The share repurchases during the years were worth $1.5 billion. The company paid ~$2.1 billion for M&As (mergers and acquisitions) during fiscal 2017, which ended on December 31, 2017.
In December 2017, UnitedHealth Group announced the acquisition of DaVita Medical Group for $4.9 billion. It undertook another healthcare acquisition in December 2017 that led to total acquisition spending of $7.7 billion for both acquisitions.