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Warren Buffett Bought UnitedHealth (UNH Stock) — Should You Buy?

August 15, 2025

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Breaking News!

Warren Buffett’s Berkshire Hathaway just bought 5 million shares of UnitedHealth (UNH Stock). This sent the stock up over 10% after-hours. In this bonus newsletter, I explain the UNH buy and give my full breakdown.

The Key Story

Warren Buffett Bought UnitedHealth (UNH Stock) — Should You Buy?

What happened

  • Berkshire Hathaway disclosed a new ~5M share stake in UnitedHealth Group (UNH) (~$1.57B).

  • The “Buffett effect” kicked in: shares jumped ~10% after-hours on the news.

  • Context: UNH had cratered ~54–55% since April, driven by a 2025 earnings decline and a Medicare Advantage investigation.

Why it’s on my watchlist

  • Price was ~39% below the 200-day average at one point; historically low valuation.

  • TTM P/E ~11 and dividend yield ~3.26%, among the highest in UNH’s history.

  • Long record of dividend growth: 10%+ annual historically.

Was it Buffett—or his lieutenants?

  • The position size (~$1.5B) is small for Berkshire and doesn’t crack their top 20.

  • Past precedent: Ted Weschler/Todd Combs often handle smaller positions (e.g., Visa, Mastercard, Amazon).

  • We’ll learn more if they scale up in future disclosures.

Could this become a “whale” investment?

  • UNH market cap: ~$245B.

  • Berkshire holds ~$347B in cash and short-term investments.

  • If rate cuts reduce T-bill appeal, a high-quality compounder like UNH could attract more capital.

Dividend & fundamentals snapshot

  • Dividend growth since starting quarterly payouts in 2010; 10-yr CAGR ~16%, 3-yr CAGR ~10.2%.

  • Payout ratios (historical):

    • FCF payout ~36% TTM (often in the 20s previously).

    • Net income payout ~52% last year (usually ~30s).

  • Balance sheet & cash generation:

    • Net debt ~$47B;

    • FCF ~$20B (FY2024) → strong coverage.

  • Long-term compounding: exceptional total returns since 1990 and ~16% annualized since 2010, even after the drawdown.

Valuation & forward look

  • Street projects ~40% EPS decline in FY2025 → forward P/E ~16.5.

  • Beyond 2025, consensus implies re-acceleration to double-digit growth; by 2029, implied P/E ~9 on those estimates (if achieved).

Risks I’m watching

  • Medicare Advantage investigation outcome and regulatory overhang.

  • Earnings reset in 2025 and leadership change (recent CEO transition).

  • Execution on returning to prior growth trajectory.

My take (not financial advice)

  • Quality + yield + reset valuation = compelling setup for dividend growth investors, with real headline risk.

  • The Berkshire buy (whoever initiated it) is a positive signal, and I’m watching for position size increases.

Tools used: Screens, charts, and AI analysis from DividendData.com (now covering 80,000+ stocks, ETFs, and mutual funds—including international). UNH is also one of the most-searched tickers on the site right now.

This is not financial advice. Do your own research before investing.

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Disclaimer: Dividend Dividend (Dividend Data LLC) is not a professional financial service. All materials released from Dividend Data (Dividend Data LLC) are for educational and entertainment purposes. Dividend Data (Dividend Data LLC) is not a replacement for a professional's opinion. Contributors to the Dividend Data (Dividend Data LLC) might have equities mentioned in the newsletter