The U.S. healthcare system is a difficult one to navigate. For many Americans, the high cost of healthcare has created the need for private or work-based insurance. The system generates billions per year in premiums. And for the benefits managers and insurance companies operating within this system, it can be a very lucrative business. As is the case for our latest Best Dividend Capture Stocks List pick.
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The secret to our pick’s success remains its size and brand recognition. Our pick is one of the big four insurance stocks associated with one of the largest benefit federations in the nation, allowing it to grow its membership base to over 45 million customers across private pay, work benefits, and government channels. This relationship provides a strong base of assets from paid premiums that helps drive a lucrative float. It’s this float that provides the meat & potatoes of an insurance company’s excess cash — cash that has long gone to its investors.
Our pick continues to grow that cash flow and asset base as well, thanks to its new forays into the specialty pharmaceutical and benefits management divisions. Chronic and rare diseases take a deft touch. With a leading position in this care and insurance marketplace, our pick has been able to grow revenues very fast. Meanwhile, new data capabilities have improved underwriting and outcomes, and have provided new sources of revenues for the firm — all with higher margins.
All in all, our pick continues to have a commanding leadership position in the health insurance marketplace and has found ways to grow that position further.
With that, investors have continued to take notice of our pick and its stability. This has made it a great dividend capture play. A dividend capture strategy involves buying a stock before its ex-dividend date and then selling it after it has recovered the payout. With an ex-dividend date of Tuesday, September 10, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 7.5 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our health insurance pick could be a lucrative option.
