Since listing on the ASX in December 2014, the share price of Medibank Private Ltd (ASX: MPL) has rallied around 35% and this week hit an all-time high of $2.97.

Investors in the initial public offering (IPO) or savvy investors who jumped aboard soon after the float have certainly enjoyed stellar returns, particularly when compared with the 7% fall in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) over the same time frame.

Investors in smaller rival NIB Holdings Limited (ASX: NHF) have also outperformed with NIB’s share price gaining around 21% since Medibank Private first traded. Perhaps not surprisingly, NIB hit an all-time high of $4.07 in March.

With both private health insurers performing so strongly, no doubt some investors are wondering whether it’s too late to buy?

Buy, hold, or sell?

According to forecast data provided by CommSec, both stocks are trading on price-to-earnings (PE) multiples for financial year 2017 of approximately 19 times.

While we obviously don’t have much historic data for Medibank Private, the average annual PE ratio for NIB over the past five years has been closer to 14 times.

Likewise, NIB has historically traded on a fully franked dividend yield significantly higher than its current yield.

While there is obviously an industry tailwind for private health insurers thanks to government policy encouraging less reliance on the public health system, there are also numerous headwinds.

These headwinds include rising marketing costs, claims inflation and policy holders trading down to lower margin, no-frills options.

On balance the outlook for the industry appears reasonable, but arguably the market has already fully priced this into the shares of NIB and Medibank.

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Motley Fool contributor Tim McArthur owns shares in NIB Holdings Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.