The Medibank Private Ltd (ASX: MPL) share price is sitting pretty today as the S&P/ASX 200 Index (ASX: XJO) lights up green.
At the time of writing, Medibank shares have climbed 0.29% to trade at $3.50 apiece.
But there's more good news for Medibank shareholders. Today is dividend payday.
It's payday for Medibank shareholders
Last month, Medibank pulled back the curtain on its FY22 results. In doing so, the ASX 200 private health insurer declared a fully franked final dividend of 7.3 cents.
Medibank shares went ex-dividend for this payment back on 7 September. So, any Medibank shares bought on or after this date won't be able to claim today's payout.
Since the company doesn't have a dividend reinvestment plan (DRP), shareholders will be receiving this dividend in cash.
Medibank declared a final dividend of 6.9 cents in FY21. So, today's payment represents a 6% uplift from the prior year.
This dividend hike was supported by a 9% growth in underlying net profit after tax (NPAT), which came in at $435 million.
Announcing the company's full-year results, CEO David Koczkar said:
Today we have delivered another strong result driven by continued policyholder growth, double-digit growth in Medibank Health and remaining disciplined in how we grow and run our business.
Medibank highlighted its customer growth as a standout during the year. The number of resident policyholders grew by 3% or nearly 61,000 over the 12-month period. What's more, the company's customer retention over the past two years is higher than at any point in the prior decade.
Across the financial year, Medibank declared total dividends of 13.4 cents, fully franked. Based on current prices, Medibank shares have a trailing dividend yield of 3.8%. Including franking credits, this yield dials up to 5.4%.
Looking ahead, broker Citi is forecasting Medibank to raise its dividends by 19% in FY23 to 15.9 cents per share. At the moment, this implies a prospective forward dividend yield of 4.5%.
Medibank share price snapshot
Medibank is one of the rare ASX 200 shares to sit in the green this year.
In fact, Medibank shares have gained an impressive 14% over the last six months. Meanwhile, the ASX 200 index has backpedalled by a similar amount.
Fellow ASX 200 health insurer NIB Holdings Limited (ASX: NHF) has matched Medibank with similar share price gains this year.
ASX insurance shares can outperform in periods where inflation and interest rates are on the rise.
As explained by the team at Wilsons, insurers "benefit from higher premiums due to the rising inflation environment and higher interest income on policyholders' funds."
It seems health insurance companies, in particular, have been the pick of the bunch so far in 2022.
Other ASX 200 insurance shares, such as QBE Insurance Group Ltd (ASX: QBE) and Insurance Australia Group Ltd (ASX: IAG), have outperformed the market. But not by nearly as much as Medibank and NIB.
Both IAG shares and QBE shares are relatively flat over the last six months.
