UNH vs WST: Dividend Comparison
Dividend data as of
Unitedhealth Group Inc (UNH) and West Pharmaceutical Services Inc (WST) are both in the Health Care sector, making them natural rivals for dividend investors. UNH offers a significantly higher 3.20% yield compared to WST's 0.34%, a gap of 2.85%. For dividend growth, WST leads with a 5-year CAGR of 13.1% versus UNH's 11.7%. Both stocks carry a "Safe" dividend safety rating. UNH is a Dividend Contender with 16 years of consecutive increases.
Verdict
Yield Analysis
UNH yields 2.85% more than WST. In dollar terms, UNH pays $8.73/share vs WST's $0.84/share annually.
Dividend Growth
UNH: Dividend growth is slowing — the 3-year CAGR of 9.4% trails the 5-year rate of 11.7% and the 10-year rate of 15.6%.
WST: Dividend growth is accelerating — the 3-year CAGR of 21.1% exceeds the 5-year rate of 13.1% and the 10-year rate of 9.7%.
Dividend Safety
UNH: The payout ratio of 45% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.2x.
WST: The payout ratio of 12% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 8.0x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in UNH vs WST today?
At $291.12 per share, $10,000 buys about 34.4 shares of Unitedhealth Group Inc (UNH). Each share pays $8.73 per year in dividends, so the position starts out generating roughly $300 per year — about $25 a month.
At $248.03 per share, $10,000 buys about 40.3 shares of West Pharmaceutical Services Inc (WST). Each share pays $0.84 per year in dividends, so the position starts out generating roughly $34 per year — about $3 a month.
UNH is the larger income stream from day one: $266 per year more on the same $10,000 invested.
What could $10,000 of UNH or WST income look like in 10 years?
Unitedhealth Group Inc (UNH) has raised its dividend about 11.7% a year over the past five years. If that pace held, the $320 per year that $10,000 generates today at the current 3.20% yield would reach $970 per year by 2036 — a 9.7% yield on the original cost.
West Pharmaceutical Services Inc (WST) has raised its dividend about 13.1% a year over the past five years. If that pace held, the $34 per year that $10,000 generates today at the current 0.34% yield would reach $118 per year by 2036 — a 1.2% yield on the original cost.
On those trailing rates, UNH pays more in 2036: $970 versus $118 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would WST's dividend growth overtake UNH's higher yield?
Not within a realistic holding period. West Pharmaceutical Services Inc (WST) is growing its dividend faster (13.1% vs 11.7% a year), but the starting-yield gap — 3.20% for UNH vs 0.34% for WST — is wide enough that the crossover sits more than 30 years out on trailing rates. For income you plan to spend, UNH's head start is decisive.
Can UNH and WST afford their dividends?
Unitedhealth Group Inc (UNH) earns $19.19 per share against $8.73 paid out in dividends — 2.2x coverage (a 45% payout ratio).
West Pharmaceutical Services Inc (WST) earns $6.75 per share against $0.84 paid out in dividends — 8.0x coverage (a 12% payout ratio).
WST's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for UNH if earnings weaken.
Which fits an early-retirement income portfolio better, UNH or WST?
For income you need right now, Unitedhealth Group Inc (UNH) leads: $100,000 invested today pays about $266 a month at the current 3.20% yield, versus $29 a month from West Pharmaceutical Services Inc (WST) at 0.34%.
With a decade or more before the income is needed, WST's faster dividend growth (13.1% vs 11.7% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: UNH has raised its dividend 16 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,328/yr in UNH vs $122/yr in WST by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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