UnitedHealth Stock Is Up More Than 30% in 1 Month and Pays a 2.5% Dividend Yield. Time to Buy?

Shares of UnitedHealth Group (NYSE: UNH) have rebounded sharply over the last 30 days. Up about 30% over that span, the health benefits and services giant is suddenly back on investors' radar again.

With the stock surging so much, have investors who didn't buy shares when it was lower missed out? Or is the stock still attractive, even after its recent run-up?

A look at UnitedHealth's latest earnings report shows a business that is making progress. But some factors in the report raise eyebrows, too.

Image source: Getty Images.

A solid start to 2026

UnitedHealth's first-quarter revenue rose 2% year over year to $111.7 billion, and non-GAAP (adjusted) earnings per share came in at $7.23. This was only slightly ahead of $7.20 in the year-ago quarter, but it's significantly above fourth-quarter 2025 levels, when adjusted earnings per share were just $2.11 as the company wrapped up a restructuring.

The more important figure may have been the medical care ratio, or medical costs as a percent of premium revenue. UnitedHealth's first-quarter medical care ratio was 83.9%, down from 84.8% in the year-ago quarter. Management said the improvement was driven by strong medical cost management and favorable reserve development, partially offset by elevated utilization and unit cost trends.

This is an important development because the main issue plaguing the company last year was profitability, and not revenue trends, as elevated medical cost trends and Medicare funding pressure weighed on margins.

Also helping the bull case, management used its first-quarter update to boost its full-year outlook.

UnitedHealth now expects 2026 adjusted earnings of more than $18.25 per share, up from its prior outlook for more than $17.75 per share. At the current stock price, this puts shares at about 19 times the low end of management's adjusted earnings outlook.

But perhaps the clearest evidence of UnitedHealth's recovery showed up in its health benefits business, UnitedHealthcare. First-quarter revenue in this segment increased to $86.3 billion from $84.6 billion in the year-ago quarter.

Momentum like this helped the overall business. The health insurance company's operating earnings rose from $5.2 billion in the year-ago period to $5.7 billion, and its operating margin expanded from 6.2% to 6.6%. Management said in the company's first-quarter update that this operating margin expansion was primarily due to repricing across its lines of business "in response to cost trends that remain elevated but in line with expectations."

Some reasons to be concerned

But not everything is moving in the right direction for UnitedHealth.

UnitedHealth served 49.1 million people in UnitedHealthcare in the first quarter -- down from 49.8 million at the end of 2025. Additionally, seniors served through Medicare Advantage declined by 965,000 during the quarter.

Further, Optum -- UnitedHealth's healthcare services business -- is still a mixed picture.

Optum's first-quarter revenue was $63.7 billion, slightly below the year-ago period, and its operating earnings fell to $3.3 billion from $3.9 billion.

So, is UnitedHealth stock a buy?

The stock's dividend yield of about 2.5% certainly looks appealing. Even more, it looks manageable; with management guiding for more than $18.25 in adjusted earnings per share and the company's current quarterly dividend payout totaling $8.84 annually, UnitedHealth will pay out less than half of its expected earnings over the next 12 months.

That said, UnitedHealth's stock's recent move higher may have fully priced in the underlying improvement in the company's business. Yes, first-quarter results were encouraging. The medical care ratio improved, management raised guidance, and pricing actions seem to be helping. But membership attrition and Optum's weaker year-over-year operating earnings are real concerns.

For investors who bought when pessimism was much greater, the recent move may feel justified. But for new investors looking at the stock today, the setup is arguably less attractive.

At about 19 times management's 2026 adjusted earnings outlook, UnitedHealth stock is not egregiously expensive. But after a more than 30% move in a month, I don't think it is cheap enough to compensate investors for the remaining uncertainties in the turnaround.

Overall, I think shares look too pricey after their recent run-up. So I'll stay on the sidelines.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.