Medibank (ASX:MPL) dividend boost as payout ratio reduced

The company has bumped up its dividend to shareholders…

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The Medibank Private Ltd (ASX: MPL) dividend received a boost following the company’s FY21 full-year results today.

However, not all was rosy as management decided to reduce the dividend payout ratio. This comes despite the company achieving a bigger net profit after tax (NPAT) over the period.

Let’s take a look at how Medibank performed for the period and when it will pay its upcoming dividend.

How did Medibank perform in FY21?

The private health insurer delivered outstanding growth for the 12 months ending 30 June 2021.

The group recorded total revenue of $6.9 billion, up 1.99% over the prior corresponding period (pcp). This was underpinned by strong net resident policyholders, up 82,500 including 29,600 for the Medibank brand.

In addition, NPAT surged to $441.2 million, a jump of 39.8% regardless of operating expenses lifting 1.12% compared to FY20. The bottom-line result was aided by net investment income of $120 million, up from $2.4 million this time last year.

In light of the robust performance, the Medibank board decided to bump up its fully-franked full-year dividend to 12.7 cents per share. This makes up a final dividend of 6.9 cents, up 9.5% from FY20.

Medibank also noted that the total ordinary dividend represents a payout ratio of 87.7% of underlying NPAT. While in range of its target payout ratio range of 75% to 85%, this is lower than the 90.1% given to shareholders in FY20.

Based on the current Medibank share price of $3.55 apiece, this gives the company a trailing dividend yield of just over 3.57%.

Medibank dividend key dates

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

Ex-dividend date

The ex-dividend date will be 8 September 2021.

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

Record date

The record date for Medibank’s final dividend is 9 September 2021.

This is the date where the company identifies which investors are on its books. Those who are on Medibank’s register will be eligible to receive its upcoming dividend.

Payment date

The payment date for Medibank’s dividend will be 30 September 2021.

This is when investors can expect to see the final dividend of 6.9 cents per share hit their accounts.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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 no position in any of the stocks mentioned. 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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