UnitedHealth Group is back in our dividend income portfolio. We owned it in the past, but sold the stock last year when its fundamentals deteriorated. Since then, I’ve been waiting for evidence that the business was actually getting better rather than trying to call the exact bottom. I think we’re finally starting to see it. Based just outside Minneapolis, UnitedHealth is one of the largest health-care companies in the U.S. Its UnitedHealthcare business provides insurance to individuals and employers, as well as Medicare and Medicaid coverage. Optum is its other major business, providing health-care services directly to patients. Key points After a difficult reset, UnitedHealth’s earnings and margins are starting to recover. Medical costs are still high, but UnitedHealth’s insurance profitability is beginning to recover. The roughly 2.5% dividend yield gives us income while we wait for the recovery to play out. UnitedHealth has been through a rough stretch. The fatal shooting of UnitedHealthcare CEO Brian Thompson in December 2024 intensified scrutiny of the company and the broader insurance industry. At the same time, higher medical costs squeezed its insurance margins. Those pressures haven’t disappeared. Elevated medical costs are still one of the biggest issues facing health insurers. CVS, which owns Aetna, recently cautioned that the pressure is continuing even as its insurance business improves. What has changed for me is that we’re finally seeing evidence that UnitedHealth’s business is improving. The past two quarters have given me enough confidence to start rebuilding our position. Why I’m buying The earnings recovery is taking shape In the second quarter, UnitedHealth generated $112 billion in revenue and adjusted earnings of $6.38 per share. Management also raised its full-year adjusted earnings guidance to $19.50 to $20 per share. Those are decent results. And while decent may not sound all that exciting, in a turnaround, it’s the progression that matters. Instead of catching the absolute bottom in the stock, I’d rather pay a little more once we’re seeing evidence that earnings are recovering, then build the position as the fundamentals continue to improve. The insurance business is turning a corner When members use more health-care services than insurers expected, insurers have to pay out more in claims, putting pressure on margins. That’s been a major problem for UnitedHealth. But there are signs of progress. UnitedHealth’s medical-care ratio, which measures how much of its premium revenue goes toward medical costs, improved to 86.7% in the second quarter. UnitedHealthcare’s operating margin also improved. UNH YTD mountain UnitedHealth, YTD I’m not saying the problem has gone away. Medical-cost inflation remains one of the biggest risks to the stock. But for a turnaround investment, I just need to see the numbers moving in the right direction. We’re getting paid while we wait UnitedHealth is also a good fit for our Enhanced Dividend Income Portfolio. This is an earnings-recovery and dividend-growth story: We can collect income today while we wait for the turnaround to play out. UnitedHealth has increased its dividend for 16 consecutive years, with the payout growing at an average annual rate of roughly 10% over the past five years. At our purchase price, the stock yields about 2.5%. That combination is attractive to me. We can collect the dividend while we wait for earnings to recover and, if the business continues to improve, potentially benefit as the stock follows. Why now? At roughly $374 a share, the stock trades at about 18 times forward earnings and remains about 20% below its 52-week high. UnitedHealth still has a long road ahead, but expectations have come down enough that I like the risk-reward at today’s price. That’s why we’re starting small, with roughly a 1% position, and leaving ourselves room to buy more as the recovery takes shape. Bottom line The pro tip here is that you don’t have to rush into a stock just because it’s been beaten down. Sometimes it’s better to be patient and let the fundamentals develop so you can confirm that a business is actually turning around. That’s what we did with UnitedHealth. We waited for signs of improvement, and now we’ve seen enough to start getting back in. Kevin Simpson is the founder and CEO of Capital Wealth Planning. Under his leadership, the firm has grown to manage over $19 billion in assets as of March 31, 2026. Disclosures: Simpson owns in Capital Wealth Planning. All opinions expressed by CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. 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