Medibank share price dips despite dividend boost

The healthcare insurer will pay its biggest final dividend since 2019.

| More on:
Five healthcare workers standing together and smiling.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Medibank share price is suffering on Thursday after the company released its earnings for financial year 2022 this morning 
  • While it posted an 11% fall in after-tax profits, it also revealed the highest dividend payment since 2019 
  • Additionally, an analyst reportedly noted the company's outlook was "better than expected" and might help relieve pricing pressure 

The Medibank Private Ltd (ASX: MPL) share price is trading in the red despite the company revealing its highest final dividend since 2019.

Those invested in the company will receive 7.3 cents per share they hold, representing a portion of the $393.9 million full-year after-tax profit posted earlier today.

When combined with the interim dividend of 6.1 cents per share paid in March, this makes Medibank's FY22 annual dividend also the highest since FY19.

The Medibank share price is trading at $3.50 right now, 0.57% lower than its previous close.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.3%.

Let's take a closer look at the latest news from the insurance-focused healthcare company.

Medibank share price slumps on full-year earnings

The Medibank share price is struggling on Thursday following the release of the company's financial year 2022 earnings.

As my Foolish colleague Aaron reported earlier today, Medibank's full-year net profit represented a 10.9% year-over-year (yoy) fall.

Meanwhile, its revenue from external customers lifted 3% yoy to more than $7 billion. Its segment operating profit rose 11.9% to $638 million.

It also expects its underlying claims per policy to grow 2.3% in financial year 2023. That figure has been heralded by analysts.

Barrenjoey analyst Andrew Adams was quoted by The Australian saying such an outlook is "likely better than expected and takes some of the pressure off the need for a step-up in premium rate increases at the next pricing review."

Medibank CEO David Koczkar said: "The pandemic has triggered a new focus on health and wellbeing, which we expect to continue. A record number of Australians continue to take out private health insurance, especially younger customers."

Today's dip included, the Medibank share price is 2% higher than it was at the start of 2022. Though, it has fallen 1% since this time last year.

For comparison, the ASX 200 has dumped 6% year to date and 5% over the last 12 months.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

More on Healthcare Shares

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

CSL share price leaping higher amid $1.9 billion funding news

ASX 200 investors are bidding up the CSL share price on Wednesday.

Read more »

Two happy scientists analysing test results.
Healthcare Shares

Mesoblast share price rockets 36% on breaking FDA news

ASX investors are sending the Mesoblast share price soaring following promising FDA news.

Read more »

a doctor in white coat and stethoscope stands in front of a building holding an electronic device in his hands.
Healthcare Shares

Guess which ASX 200 healthcare share is jumping 7% on a guidance update

This healthcare share is performing better than expected in FY 2024.

Read more »

a biomedical researcher sits at his desk with his hand on his chin, thinking and giving a small smile with a microscope next to him and an array of test tubes and beackers behind him on shelves in a well-lit bright office.
Earnings Results

Chemist Warehouse merger target Sigma reports 149% FY24 profit jump

This could be the last set of results from Sigma as we know it if its merger is approved.

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

1 ASX healthcare stock that looks severely undervalued

I think this stock looks too cheap to miss.

Read more »

Stethoscope with a piggy bank and hundred dollar notes.
Healthcare Shares

Own Medibank shares? Here's why it's a rewarding day for you

Shareholders are getting a healthy boost today.

Read more »

Health professional looking at a laptop.
Healthcare Shares

Are CSL shares a must-buy in March?

Let's see what analysts are saying about this high-quality company.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

This ASX healthcare stock is up 72% on FDA news and 'historic moment'

Huge gains are been recorded by this stock on Tuesday. But why?

Read more »