Key Points

• Shares of UnitedHealth Group and Dow Inc. have been beaten down so far that they offer unusually high dividend yields right now.

• Dow Inc.'s reduced dividend payout puts the company in a good position to overcome several challenges facing its industry.

• UnitedHealth Group mispriced premiums going into 2025, but this isn't a mistake it's likely to make in 2026.

• 10 stocks we like better than UnitedHealth Group ›

Investors looking for unusually high-yielding dividend stocks have a couple of interesting options these days. Shares of at least two well-established businesses have been beaten down by more than half from their previous peaks.

Lowered stock prices have raised the average dividend yield investors could receive from Dow Inc. (NYSE: DOW) and UnitedHealth Group (NYSE: UNH) to 5.1% at recent prices. Here's why buying them now and holding over the long run could boost your passive income stream during retirement.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Dow Inc.

Responding to a years-long industry downturn, Dow Inc. lowered its quarterly dividend payout by 50% to $0.35 per share last month. As is often the case, the dividend slash upset the market.

From the closing bell on July 23 through August 11, shares of Dow Inc. lost about 31% of their value. At its beaten-down price, the stock offers a tempting 6.7% yield.

The commodity chemicals that Dow Inc. makes, such as polyethylene, are used to produce consumer goods and their packaging. Generally, a strong economy results in increased demand for its products, and vice versa. Unfortunately, interest rates that rose sharply a few years ago weakened global demand for plastic.

Interest rates aren't the only challenge Dow is facing right now. China has long been a major source of demand for polyethylene and other chemicals that Dow produces. Unfortunately for Dow, China's been ramping up its own supply in recent years.

This year, the threat of new tariffs that change day by day is causing manufacturers all over the world to dial down their activity. Considering the combination of issues affecting Dow Inc. and its peers, slashing the dividend payout was the right move.

Keeping up with its new quarterly payment shouldn't be too difficult. Reducing the payment will give Dow Inc. an extra $992 million annually to help make ends meet.

Last month, Dow announced that it would shut down three facilities in Europe to reduce expenses. In addition to lowering operating costs by shuttering facilities, Dow recently reduced its capital expenditure outlay for 2025 by $1 billion. With lowered expenses, Dow should have little trouble holding dividend payments steady until the basic materials space heats up again.

2. UnitedHealth Group

If there's one thing you can count on, it's increasing demand for healthcare. As America's largest health benefits management business, UnitedHealth Group has been a reliable dividend grower for over a decade.

UnitedHealth Group began paying a quarterly dividend in 2010, and it's been growing rapidly ever since. The company's raised its payout by 342% over the past 10 years.

Fast dividend growers generally offer ultra-low yields, but UnitedHealth Group stock is down by about 50% this year. At its beaten-down price, it offers an unusually high 3.5% yield.

In 2025, UnitedHealth Group took on heaps of new Medicare Advantage patients who visited a lot more healthcare providers than was expected. The company suspended its forward outlook in May, then issued new guidance in July.

This year, UnitedHealth Group expects to earn an adjusted $16 per share. This is heaps more than it needs to meet a dividend payment set at an annualized $8.84 per share.

UnitedHealth Group's new and existing members are racking up higher healthcare expenses than expected, but this is only a temporary problem for the benefits management business. Increasing costs from healthcare providers and increasing costs due to rising usage from members are always passed on to health plan sponsors and patients in the form of higher premiums. Adding some shares of this stock to your portfolio looks like a nearly certain way to boost your passive income stream down the road.

Should you invest $1,000 in UnitedHealth Group right now?

Before you buy stock in UnitedHealth Group, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and UnitedHealth Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $653,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,119,863!*

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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

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Anthropic’s Claude Sonnet 4 now supports a 1 million token context window, enabling AI to process entire codebases and complex documents in a single request—redefining software development and enterprise AI workflows.Read More

Key Points

• C3.ai's business has benefited from organizations rushing to adopt AI solutions, such as the U.S. Air Force.

• The company reached record revenue in its fiscal fourth quarter, and forecasts more sales growth ahead.

• C3.ai is not profitable, and a change in CEO is on the horizon.

• 10 stocks we like better than C3.ai ›

Artificial intelligence (AI) stocks have been hot, and many experienced strong growth in 2025 alone. For example, this year, AI luminaries Nvidia and Broadcom saw shares soar more than 30% and 26%, respectively, through July 28.

But one lackluster AI stock has been C3.ai (NYSE: AI). Its shares are down about 25% this year through July 28. Could the price drop signal an opportunity to scoop up shares at a discount? After all, the global AI market is forecast to expand from $244 billion in 2025 to $1 trillion by 2031, providing a tailwind for C3.ai's business.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The reality is that evaluating whether to purchase its stock requires digging into the company. Let's delve into C3.ai to help assess if it's a sound investment for the long run.

A look at C3.ai's business

C3.ai is an enterprise AI applications business servicing the needs of corporate and government organizations. Its customers include the U.S. Department of Defense, Dow Inc., and ExxonMobil.

The company built a network of partnerships to assist in selling its solutions, which includes Microsoft and energy giant Baker Hughes. These alliances resulted in partners closing 73% of the customer agreements signed in C3.ai's 2025 fiscal year, ended April 30.

C3.ai's business model translated into record revenue of $108.7 million, a 26% year-over-year increase, in its fiscal fourth quarter. For the full year, sales grew 25% year over year to $389.1 million.

The company's offerings have proven popular with customers. In May, the U.S. Air Force expanded its contract with C3.ai from $100 million to $450 million to supply predictive analytics that proactively identify aircraft maintenance needs.

In June, Univation Technologies, a Dow subsidiary, adopted C3.ai's predictive maintenance capabilities to deliver to its petrochemical industry customers.

C3.ai's pros and cons

The company's customer wins this year suggest more revenue expansion to come. In fact, C3.ai forecasts fiscal 2026 sales to reach between $447.5 million and $484.5 million, another solid year of growth over fiscal 2025's $389.1 million.

Despite rising sales, C3.ai's business isn't profitable. It ended fiscal 2025 with an operating loss of $324.4 million, deepening from a $318.3 million loss in the prior year. Costs increased from adding employees to support its business growth.

On top of that, a health issue struck CEO Tom Siebel this year, and the company is now searching for a successor. This is unfortunate news, and it contributed to the decline in C3.ai's share price. The stock price drop is understandable, since a leadership change risks disrupting the company's future success.

However, C3.ai is striving to cut costs and strengthen its finances. Management expects to be free-cash-flow (FCF) positive by next year. It ended fiscal 2025 with negative FCF of $44.4 million, which is an improvement over the previous year's $90.4 million in negative FCF.

Its balance sheet shows C3.ai is well capitalized with total assets of $1 billion, $742.7 million of which represent cash, cash equivalents, and short-term investments. Total liabilities were $187.6 million.

Deciding whether to buy C3.ai stock

Although C3.ai isn't profitable, its strategy to prioritize business expansion over immediate profit follows a typical approach adopted by many companies in the technology sector. As long as year-over-year revenue growth remains strong and it continues to improve its financials, such as reaching positive FCF, C3.ai's operating loss isn't a major concern.

The impending departure of its CEO is regrettable, but Siebel intends to continue shepherding the company as executive chairman. This positions C3.ai for a smooth leadership transition.

With plenty of positives in its favor, does this mean now is the time to buy C3.ai's shares? To answer that, here's a look at its stock's price-to-sales (P/S) ratio with a comparison to Microsoft's, given Microsoft sells C3.ai's offerings, and is a prominent AI business in its own right.

Data by YCharts.

The chart reveals C3.ai's valuation has significantly improved, as evidenced by the substantial drop in its P/S multiple from its late 2024 peak. This multiple is now considerably lower than Microsoft's, further highlighting C3.ai's attractive valuation.

This, combined with growing sales, a robust balance sheet, and strengthening free cash flow, makes C3.ai stock a compelling investment opportunity.

Should you invest $1,000 in C3.ai right now?

Before you buy stock in C3.ai, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and C3.ai wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,064,820!*

Now, it’s worth noting Stock Advisor’s total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 29, 2025

Robert Izquierdo has positions in Broadcom, C3.ai, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends Broadcom and C3.ai and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.