The U.S. healthcare system is a complex machine. And health insurance is a key cog in making sure that machine runs smoothly. Benefits providers are key middle men that help millions of Americans pay for care. For the stocks that operate in this sector, it can be quite lucrative. This includes our last Best Dividend Capture Pick, which has a long history of dividend increases, including its 13.8% jump.
You can check out the Best Dividend Capture Stocks List to explore all the stocks.
After years of M&A and divestiture, our pick is one of the largest health insurance organizations on the planet. This includes millions of customers across federal/state, enterprise, and private pay customers. The combination provides plenty of premiums for our pick to feast on while it waits to pay out claims. That’s the win of insurance companies. This float and interest on it is pure gravy for the insurance firm and scale plays a huge role in increasing its assets and cash flows.
Our pick has continued to find growth as well. As one of the larger players, our pick has continued to make smart moves with regard to bolt-on transactions and buyouts. This includes smaller regional players to expand its reach as well as tangential businesses to provide a total health package. Moreover, it continued to push into private pay plans and Medicare supplement insurance, adding higher margin revenues to its book of business.
The combination of its huge size and scope as well as a strong premium/float profile has made our pick 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, March 5, our pick is primed for the strategy, as is evident from its historical track record of a recovery period within an average of 5.3 days after going ex-dividend.
For investors looking for a quick total return of income and capital appreciation, our latest health insurance stock could be a lucrative option.
