NIB (ASX:NHF) dividend up 70%, shares sink regardless

The company has rewarded shareholders with a bumper dividend…

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The NIB Holdings Limited (ASX: NHF) dividend received a strong boost following the company’s FY21 full-year results today.

No doubt, investors will be pencilling in the date when the private health insurer pays its final dividend in October.

Below we take a look at NIB’s FY21 scorecard and the details of its upcoming dividend.

How did NIB perform in FY21?

Despite NIB shares dropping throughout the day, the company reported a solid 12 months ending 30 June 2021.

The group recorded total revenue of $2.6 billion, up 2.9% over the prior corresponding period. Sales momentum continued throughout the year, with arhi (Australian Residents Health Insurance) policyholder growth lifting 4.2%. In comparison, the industry average is around 3.1% per annum.

Furthermore, the company expense claim came in at $2 billion, up 2.5% on this time last year. This consisted of 378,900 hospital claims and over 3.9 million dental, optical, and other ancillary claims across the board.

On the bottom line, NIB posted Net Profit After Tax (NPAT) of $160.5 million, up 84.5% against FY20. The sound end result benefited from net investment income of $51.8 million. Return on invested capital (ROIC) of 19.1% was in line with pre-pandemic levels.

In light of the robust performance, the NIB board decided to bump up its fully-franked full-year dividend to 24 cents per share. This makes up a final dividend of 14 cents and the interim dividend of 10 cents declared in February 2021.

Based on the current NIB share price of $7.21 apiece, this gives the company a trailing dividend yield of just over 3.3%. The payout ratio is roughly 68.2% of FY21’s NPAT.

NIB chair, David Gordon commented:

Overall, the NIB group is in very good shape. We continue to grow with increased profitability, we are well capitalised and there is no shortage of opportunity ahead.

NIB dividend key dates

NIB released the distribution amount and payment dates of its final dividend for the 2021 financial year. Here’s a summary of the important dates NIB shareholders will need to know.

Ex-dividend date

The ex-dividend date will be 2 September 2021.

Typically, one day before the record date, the ex-dividend date is when investors must have purchased NIB shares. If the investor does not buy NIB shares before this date, the dividend will go to the seller.

Record date

The record date for NIB’s final dividend is 3 September 2021.

Essentially acting as the cut-off date, this is the date where the company identifies which investors are on its register. Those who are on NIB’s books will be eligible to receive its upcoming dividend.

Payment date

The payment date for NIB’s dividend will be 5 October 2021.

This is when investors can expect to see the final dividend of 14 cents per share land in their accounts.

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Motley Fool contributor Aaron Teboneras owns shares of NIB Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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