Why did the NIB share price fall today?

There's a simple reason.

| More on:

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

The NIB Holdings Limited (ASX: NHF) share price fell on Thursday, closing 3.68% lower at $6.02.

Meantime, the S&P/ASX 200 Index (ASX: XJO) finished 0.40% higher at 7,982.4 points.

The ASX financial share hit an intraday low of $6.01, which is not far off its 52-week low of $5.98. The health insurer hit that new annual low share price on 26 August after it released its FY24 report.

NIB revealed a net profit after tax (NPAT) of $181.6 million in FY24, up an impressive 67.4%.

This was one of the biggest profit boosts reported during earnings season. However, investors were unimpressed. The NIB share price tumbled 17.74% on the day the report was released.

So, why did NIB stock languish close to its 52-week low today?

There's a simple reason.

Health professional looking at a laptop.

Image source: Getty Images

NIB share price falls amid ASX 200 gain on Thursday

The NIB share price only fell today because it's ex-dividend day.

That means NIB shares bought from today do not have the entitlement to the next dividend attached.

That dividend is worth 14 cents per share with 100% franking. NIB will pay its investors on 8 October.

The final dividend comes on top of the company's interim dividend of 15 cents per share, which was paid in April.

All up, NIB's full-year dividend was 29 cents per share. This represents a dividend yield of 4.81% plus franking on the closing NIB share price.

How did NIB's FY24 numbers look?

The company reported a 9.3% uplift in revenue in FY24 to $3.3 billion. It increased its number of policyholders by 2.5%, which it expects will be above the industry average.

NIB said it had a record year of sales in its Australian residents health insurance (arhi) segment.

It also reported a 19% increase in international inbound health insurance (iihi) revenue to $192.8 million due to strong demand from overseas workers coming to Australia.

NIB said its New Zealand insurance revenue rose by 10.2% to $371.2 million.

The NIB Travel gross profit (after acquisition costs) increased by 7.8% to $54.2 million as the global travel market continued to recover from COVID-19.

NIB Thrive NDIS fee income also went up by 39.8% to $51.3 million.

But the year also brought some challenges, including a 4.9% increase in claim costs to $2.1 billion.

NIB CEO Mark Fitzgibbon said:

Claims experience is accelerating from an artificially low COVID-19 utilisation base and together with hospital cost pressures, is placing pressure on premiums and underwriting margins. This inflation is manageable and will normalise in the medium term.

NIB share price snapshot

The NIB share price is down 18% in the year to date compared to a 23% lift in the S&P/ASX 200 Financials Index (ASX: XFJ) over the same period.

Motley Fool contributor Bronwyn Allen 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 positions in and has recommended NIB Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

People sitting in rows in a meeting with one person holding their hand up as if to ask a question.
Financial Shares

AFIC profit rises, dividend steady as portfolio underperforms ASX 200

AFIC lifts FY26 profit and maintains dividend, but portfolio trails ASX 200.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Financial Shares

Are Macquarie shares a buy, hold or sell following the company's leadership transition?

The company is performing well, but are the shares good value?

Read more »

A female athlete in green spandex leaps from one cliff edge to another.
Share Gainers

Guess which $1.8 billion ASX 200 stock is leaping 33% on Thursday!

Investors are sending this ASX 200 stock to the moon today. But why?

Read more »

happy group of people
Financial Shares

Generation Development Group posts 36% lift in FUM and record inflows for FY26

Generation Development Group’s funds under management surged 36% to $46.4 billion, with record inflows and new partnerships in FY26.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Financial Shares

WAM Income Maximiser declares monthly fully franked dividend

WAM Income Maximiser has declared a fully franked 0.68 cent monthly dividend, with DRP available for shareholders.

Read more »

a woman checks her mobile phone against the background of illuminated share market boards with graphs and tables.
Financial Shares

Macquarie Group announces new CEO as Shemara Wikramanayake prepares to retire

Macquarie Group has named Greg Ward as its next CEO.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Financial Shares

Regal Partners: Profit doubles and FUM hits record high

Regal Partners’ 1H26 earnings update sees profit double and record net inflows boost FUM to new highs.

Read more »

Arrows pointing upwards with a man pointing his finger at one.
Financial Shares

AMP shares have surged 80% since March. What's next?

Do experts think there's more to come or is much of the good news already priced in?

Read more »