How do Medibank (ASX:MPL) dividends compare to NIB?

How do the dividend yields of these 2 private healthcare insurers stack up for income investors?

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man holding two stacks of coins varying in size representing a comparison of dividend yields between Medibank and NIB

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Key points

  • Medibank Private and NIB are both ASX 200 health insurance heavyweights
  • Both offer robust dividend yields, complete with full franking
  • But which private health insurer comes out on top for income investors?

The Medibank Private Ltd (ASX: MPL) share price is enjoying a pretty positive day on the ASX boards this Friday. At the time of writing, the Medibank share price is up 0.3% at $3.29. That also puts this private health insurer at a robust 11.5% gain for the past 12 months. It also puts its trailing dividend yield at a solid 3.85%.

Given Medibank usually includes full franking credits with its dividends, that means this company is today offering a grossed-up yield of 5.5%. That’s objectively not a bad yield from an ASX 200 dividend share. It’s more than what Commonwealth Bank of Australia (ASX: CBA) shares are offering right now, for starters.

But how do Medibank dividends compare to those of ASX-listed arch rival NIB Holdings Limited (ASX: NHF)?

Well, let’s check out the recent history of the Medibank dividend before we start the comparisons. So that 3.85% trailing yield comes from Medibank’s 2 dividend payments doled out in 2021. The first was the interim dividend of 5.8 cents a share that shareholders received last March. The second was the final dividend of 6.9 cents paid in September.

Both payments were fully franked, as flagged earlier. Together, that equates to a total of 12.7 cents per share in dividends for 2021, a hearty increase over the 12 cents per share Medibank dividend paid in 2020. But this is not quite at the high watermark of 15.6 cents per share dividend that Medibank paid in 2019.

So how do those payments compare to that of NIB?

How do Medibank dividends compare to NIB?

Well, to kick things off, NIB shares currently have a trailing yield of 3.64%, based on the current share price of $6.59 that we see today. That grosses-up to 5.2% with full franking credits.

That yield comes from the interim dividend of 10 cents a share that we saw last April. As well as the final dividend of 14 cents per share paid out last October. Both payouts were fully franked. That equates to a 2021 total of 24 cents per share, a record high dividend from NIB.

So it appears that the Medibank dividend is the leader here (if only just) for income investors. We’ll have to see if that holds up when both Medibank and NIB’s 2022 dividends come through the door.

Medibank share price snapshot

While the Medibank share price is up a healthy 11.5% over the past 12 months, it has weakened in 2022. The share price has fallen by 4% since the year began.

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Motley Fool contributor Sebastian Bowen 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 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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