Medibank share price dips despite dividend boost

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

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.

Five healthcare workers standing together and smiling.

Image source: Getty Images

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.

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