Dividend stocks are increasingly popular with both every day and billionaire investors. A CNBC report noted that for many, dividend stocks are always a solid choice, offering a steady income from corporate cash flow, which provides stability despite fluctuations in stock prices. With both the stock and bond markets experiencing significant volatility, these stocks are becoming even more attractive, serving as a balanced option between growth and yield for a broader range of investors.
The long-term appeal of dividend-paying stocks remains robust, especially for investors aiming to reduce risk while still pursuing growth. Ramona Persaud, portfolio manager of the Fidelity Equity-Income Fund and Fidelity Global Equity Income Fund, typically prefers high-quality companies that offer reliable dividends and are attractively priced. She highlighted that declining interest rates can benefit dividend stocks, as their yields become more appealing compared to bonds. Additionally, Persaud mentioned that lower rates could help drive broader market gains, unlike the recent performance, which was mainly driven by a few large growth stocks.
Her investment strategy focuses on companies with strong balance sheets, consistent cash flows, and significant return potential. She also stresses the importance of valuation—seeking stocks that are reasonably priced compared to their peers and historical averages—while targeting dividend yields that stand out in the current market. This blend of quality, value, and income, she believes, has contributed to the fund’s strong performance in both rising and declining markets.
Dividend stocks are gaining popularity once more in the current market, following two years of losses amid the dominance of high-performing tech stocks. The Dividend Aristocrat Index, which tracks the performance of companies with at least 25 consecutive years of dividend growth, is down by a little over 2% since the start of 2025, compared with a nearly 6% decline in the broader market. This trend indicates that dividends are gaining traction, with more companies introducing dividend policies and existing dividend payers gradually increasing their payouts to attract investors. An S&P Global report projects that 408 companies in the broader market will pay dividends in 2025. Of these, nearly 350 are expected to raise their dividends over the next year, contributing to an estimated 6% growth in total dividends compared to the previous year. In the overall US market, aggregate dividend growth is forecasted to be 4.6% in 2025. Since S&P companies account for about 85% of all US dividend payments, the S&P index serves as a reliable indicator of broader dividend trends.
Dividend stocks are also a key component of many billionaire investors’ portfolios. For instance, Warren Buffett has been earning billions annually from dividend stocks, setting a strong example for other investors, as his strategies are highly regarded. In fact, nearly 90% of the companies in his Q4 portfolio pay dividends, and many of them are also known for growing their dividends over time.
UnitedHealth Group Incorporated (UNH): One of the Best Long-Term Dividend Stocks to Buy According to Billionaires
A senior healthcare professional giving advice to a patient in a clinic.
Our Methodology
To compile this list, we screened for dividend stocks that have strong financials and solid dividend policies. From that group, we picked 10 companies that were most popular among billionaire investors, as per Insider Monkey’s billionaire database of Q4 2024. The stocks are ranked according to the number of billionaires having stakes in them.
At Insider Monkey, we are obsessed with hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
UnitedHealth Group Incorporated (NYSE:UNH) is an American health insurance company. The company provides a broad range of related products and services to its customers. UnitedHealth Group Incorporated (NYSE:UNH) and other major health insurers received a boost on April 8 after the Centers for Medicare and Medicaid Services (CMS) announced that Medicare Advantage plans would see a larger-than-expected payment increase in 2026.
In its Q1 2025 earnings report, UnitedHealth Group Incorporated (NYSE:UNH) posted $109.5 billion in revenue, representing a 9.8% year-over-year increase. The company expanded its customer base by 780,000 people and confirmed that its Optum Health division aims to provide value-based care to an additional 650,000 patients in 2025. Company leadership highlighted ongoing efforts to manage current challenges while remaining focused on achieving its long-term earnings growth target of 13% to 16%.
UnitedHealth Group Incorporated (NYSE:UNH) also reported strong cash generation for the quarter, with $5.5 billion in operating cash flow. It returned roughly $5 billion to shareholders through dividends and share repurchases and has consistently paid dividends since 2010. The company offers a quarterly dividend of $2.10 per share and has a dividend yield of 2.01%, as of April 27.
Insider Monkey’s Q4 2024 database indicated that 23 billionaires held stakes in UnitedHealth Group Incorporated (NYSE:UNH), worth collectively over $8.1 billion. Rajiv Jain’s GQG Partners was one of the company’s leading stakeholders in Q4.
Overall, UNH ranks 2nd on our list of the best long-term dividend stocks according to billionaires. While we acknowledge the potential of UNH as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued dividend stock that is more promising than UNH but that trades at 10 times its earnings and grows its earnings at double digit rates annually, check out our report about the dirt cheap dividend stock.
