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Here’s why NIB Holdings Limited has been hammered today

Leading Australian health insurance business NIB Holdings Limited (ASX: NHF) has seen its shares plummet back down to earth today, trading 22 cents or 6.55% lower early in the session with the stock now trading ex-dividend.

After the company reported a 3.9% increase in net profit and a 15.6% rise in premium revenue for the year ending 30 June 2014, it not only declared a final ordinary dividend worth 5.75 cents per share (cps), but also a special once-off dividend worth 9 cps. Investors holding the shares yesterday will be entitled to the dividends which will be paid on 3 October, 2014.

NIB Holdings has delivered strong returns over the last 12 months. Even with today’s decline the stock has still risen 48.5%, outperforming the benchmark S&P/ASX 200 (INDEXASX: XJO) by roughly 41% in that time. Although the future still looks promising for the company, it is now trading on a P/E ratio of 19.4x, indicating that it is no longer trading under the market’s radar. For superior returns, investors may want to consider other alternatives.

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Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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