While much of the market is chasing skyrocketing stocks, there are at least a few dividend-paying companies trading at attractive prices. These three companies can provide passive income over the long term.
UnitedHealth Group
UnitedHealth Group is America’s largest health insurance company. UnitedHealth Group collects monthly premiums from nearly 53 million people and employs 85,000 doctors and nurses.
If there’s one industry you can count on to grow, it’s America’s health care sector. National healthcare spending reached $4.3 trillion in 2021, and that number is expected to grow by 5.4% annually through 2031.
Collecting premiums and providing healthcare services isn’t as compelling as UnitedHealth Group’s growth rate. Profit from operations rose 16% year over year in the first fiscal quarter to $8.1 billion. Operating profit for the first fiscal quarter nearly doubled from 2018’s $4.1 billion.
Staying competitive shouldn’t be a problem for America’s largest health insurance company. UnitedHealth acquired Change Healthcare last October. This is an analytics business that provides access to data on competing companies in the healthcare sector.
UnitedHealth Group shares suggest a low yield of 1.6% at recent prices, but investors should know that dividends are growing as fast as earnings. The quarterly payment is up 109% over the past five years and 571% over the past decade. Adding a few UnitedHealth Group stocks to your portfolio now can help you generate solid passive income when you’re ready to retire.
Medtronic
Medtronic (NYSE: MDT) is the world’s largest manufacturer of medical equipment. The company’s product catalogue contains virtually everything needed to run a modern medical facility.
Economies of scale allow Medtronic to profit from selling mediocre devices that hospitals can purchase from a long list of competitors. Its huge operations also allow the company to meet its dividend obligations, putting $2.7 billion into research and development of next-generation devices that can really drive earnings growth.
Right now, Medtronic stock suggests a yield of 3.1%. The combination of innovation and large-scale manufacturing has allowed Medtronic to increase its dividend payout for 46 consecutive years.
Enbridge
Enbridge (NYSE: ENB) is an oil and gas pipeline operator, and this corner of the energy sector is known for stability. Oil and gas production facilities can become unprofitable overnight when commodity prices fall, but pipeline operators like Enbridge are paid by volume.
Getting paid by volume means Enbridge isn’t as concerned about changes in supply and demand as the producers who rely on its pipes. Careful capital controls and America’s ever-increasing reliance on oil and gas from Canada have allowed Enbridge to increase its dividend for 28 consecutive years. Those increases have been significant enough to see its payout rise 115% over the past decade.
With America’s dependence on oil and natural gas seeing no end in sight, another decade of steadily rising Enbridge earnings doesn’t seem unrealistic. Buying this stock now and holding it for the long term looks like the right move.
