Medibank Private Ltd (ASX: MPL) shareholders might be feeling frustrated after the company's share price tumbled 6% over the last week.
The private health insurer released its half-year results for the 2022 financial year, reporting single-digit increases across key metrics.
Nonetheless, the board opted to increase its upcoming interim dividend to eligible investors.
Let's take a look below at what you need to know.
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What's the deal with Medibank interim dividend?
The Medibank share price backtracked late last week, which appears to have been caused by an underwhelming performance.
In total, the company will be paying out 6.1 cents per share for the 6 months ended 31 December 2021. That's 5% higher than last year's interim dividend for financial year 2021.
Furthermore, the payout ratio for the latest dividend is at 78.5% (in line with the target range of 75% – 85%).
Management noted that the full-year dividend for FY22 is expected to be towards the top end of the above target range.
The higher dividend came despite Medibank's net profit after tax (NPAT) falling 2.7% to $220.2 million over the first half. It noted that a $40.9 million, or 57% decrease, in net investment income dragged down the company's bottom line.
When can shareholders expect to be paid?
Medibank will pay the interim dividend to eligible shareholders next month on 24 March.
However, to be eligible you'll need to own Medibank shares before the ex-dividend date on Friday 4 March. This means if you want to secure the dividend, you will need to purchase Medibank shares by Thursday 3 March at the latest.
It is worth noting that on the ex-dividend day, the share price traditionally falls in proportion to the dividend amount.
In addition, the dividend is fully-franked which means that investors will receive tax credits when tax time comes along.
Currently, Medibank has a dividend trailing yield of 4.16% and a market capitalisation of roughly $8.4 billion.
