Healthcare Stocks Outshine Treasuries in Dividend Growth

The current high Treasury yields might seem attractive, but dividend stocks can offer more in the long run. Three healthcare companies - CVS Health, Abbott Laboratories, and UnitedHealth Group - yield less than the 5.2% 10-year Treasury note but have a proven track record of growing their dividends.

CVS Health's nationwide reach provides a steady revenue stream that funds its larger healthcare operations. The company pays a $2.66-per-share dividend, which translates to roughly a 3% yield. Wall Street analysts rate it a strong buy with approximately 45% upside over the next year.

Abbott Laboratories has increased its payouts for 54 consecutive years, and its underlying business is still growing. The company beat its Q2 estimates and raised full-year EPS guidance. Analysts assign a consensus strong buy rating to Abbott, citing its high target price with up to 43% upside potential.

UnitedHealth Group is the largest health insurer in the country, covering tens of millions of Americans through employer, Medicare, and Medicaid plans under its UnitedHealthcare arm. The company has increased its dividends for the last 17 consecutive years and pays a $9.28 forward dividend, which translates to about a 2.4% yield. A consensus among 26 analysts maintains a strong buy rating for the stock, with a high target price implying 42% potential upside.