The Medibank Private Ltd (ASX: MPL) share price has drifted lower, whcih this has given investors the chance to buy with a larger dividend yield.
When a share price declines, it means the dividend yield rises at a similar rate.
For example, if a business had a dividend yield of 5% and the share price declines 10%, then the dividend yield becomes 5.5% – a rise of 10%.
At the time of writing, the Medibank Private share price has declined by 14% since 7 August 2026, as shown in the chart below.
The business could be an attractive opportunity to look at for passive income. Let's take a look at whether it's a good buy today.
Image source: Getty Images
Dividend projection
The company reported a solid set of numbers in FY26, and this could continue into the 2027 financial year.
FY26 saw 22,100 (or 1.1%) net resident policyholder growth, with health insurance operating growth to $769.8 million. Segment operating profit rose 6.4% to $870.5 million, partly thanks to Medibank's healthcare segment profit rising 31.3% to $100.7 million.
The company's 6.7% rise in group operating profit to $813.5 million helped fund a 6.7% rise in the dividend per share to 19.2 cents.
At the current Medibank Private share price, the FY26 dividend translates into a grossed-up dividend yield of 6%, including franking credits, at the time of writing.
The projection on CMC Invest suggests that the ASX healthcare share could increase its annual dividend per share by 6.25%, leading to the company's FY27 grossed-up dividend yield rising to 6.4%, including franking credits, at the time of writing.
That's an impressive dividend yield for a business offering defensive earnings and exposure to the long-term tailwind of ageing demographics. It looks more appealing than the term deposit rates at the moment.
The company's FY27 guidance of resident policyholder growth, non-resident private health insurance gross profit growth, and an increase in healthcare segment profit suggests to me that the 2027 financial year could be another good year.
Is this a good time to invest at the current Medibank Private share price?
According to CMC Invest, there have been seven analyst ratings on the business within the last three months. Two of those analyst ratings were a buy, and five analyst calls were a hold.
A price target tells us where analysts think the share price will be in 12 months from the time of the investment call.
The average price target of those seven analyst ratings is $5.03. Therefore, those analysts collectively suggest that the Medibank share price could rise by more than 10% over the next 12 months.
Combined with the dividend return, the business could be a market beater over the next year.
