Here's why I'll be watching the Medibank results like a hawk

There's one thing I'll be paying close attention to next week.

| More on:
A doctor appears shocked as he looks through binoculars on a blue background.

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

ASX earnings season is now in full swing on the Australian share market. We've already heard from some big names so far, including Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), Telstra Group Ltd (ASX: TLS) and Wesfarmers Ltd (ASX: WES). Next week, Medibank Private Ltd (ASX: MPL) will join them

Yes, Medibank is scheduled to drop its latest earnings, covering the six months to 31 December 2023, next Thursday, 22 February.  It's a report I'll be watching like a hawk.

I am interested in all of the financials the company is set to give investors a look at. Last year, my Fool colleague Tristan covered how the insurer expected to "achieve total resident policyholder growth in FY24 of between 1.5% to 2%". It will be interesting to get a report card on how that's going.

I'm also keen to see how Medibank's investment portfolio is faring. After all, higher interest rates have boosted the company's investment returns in the past.

But I'll be paying special attention to what Medibank has to say about its next dividend.

Why I'll be watching the next Medibank dividend

I've long regarded Medibank as a leading candidate in the ASX healthcare space for dividend investors. It has something that most ASX shares don't. That's explicit support from the Australian government.

There are many government policies that herd customers towards Medibank and its private health insurance offerings. The Medicare surcharge, lifetime health cover loadings, private health insurance rebates… not too many other ASX shares benefit from this kind of customer encouragement.

This has helped shape Medibank into a reliable dividend payer. As such, it's the dividend announcement from Medibank that I'll be paying the closest attention to next week.

In 2023, Medibank showered investors with its largest dividends since the company was privatised in 2014. Shareholders enjoyed a March interim dividend worth 6.3 cents per share, and a final dividend in October of 8.3 cents per share. Both payments came fully franked. And both payments were increases over 2022's interim and final dividends of 6.2 cents and 7.3 cents per share, respectively.

These dividend payments have resulted in Medibank shares offering a generous fully-franked dividend yield of 3.86% at current pricing. If Medibank announces an even higher dividend next week, my belief that this company is a fantastic income stock for dividend investors will only solidify.

Motley Fool contributor Sebastian Bowen has positions in CSL, Telstra Group and Wesfarmers. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group and Wesfarmers. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Opinions

Three women cruise along enjoying ice-creams in the sunshine.
Dividend Investing

Passive income powerhouses! 3 ASX shares I'd consider buying for rising dividends

Here are three ASX dividend shares that I think are worth considering today.

Read more »

Man waiting for his flight and looking at his phone.
Growth Shares

Near its 52-week low, this ASX growth stock could be the bargain of the year!

I think this stock could be a leading opportunity.

Read more »

Two kids in superhero capes.
Small Cap Shares

2 ASX small-cap shares I'd buy for massive growth potential

I’m bullish about these two stocks.

Read more »

a man at the wheel of car with dashboard in view, driver technology shares,

Is this ASX All Ords retail stock too cheap to ignore?

It's tough to be a retailer, but is the market punishing this ASX small cap share too much?

Read more »

Three kids with attitude

3 lower-risk ASX shares I think are perfect for beginners

Here are three ASX shares that are ideal for risk averse investors, in my opinion.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares

Why I'm planning to buy Guzman y Gomez shares and own for the long-term

I think this business has a strong outlook.

Read more »

Two people comparing and analysing material.

Are BHP or Wesfarmers shares a better buy?

Should investors be more interested in the owner of Bunnings or Australia’s biggest miner?

Read more »

Woman with a moving box on her head.

1 ASX small-cap stock that could benefit from the rental crisis

Noticed the rental market shortage? This may be an opportunity for this ASX small-cap share.

Read more »