Understanding the Dividend History, Yield, Growth, and Sustainability of Medibank Private Ltd (MDBPF)

Medibank Private Ltd (MDBPF) recently announced a dividend of $0.08 per share, payable on 2023-10-05, with the ex-dividend date set for 2023-09-13. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Medibank Private Ltd's dividend performance and assess its sustainability.

About Medibank Private Ltd

Warning! GuruFocus has detected 5 Warning Sign with REG. Click here to check it out.  High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock?

Previously owned by the Australian government, Medibank is the largest health insurer in Australia. Its two brands, Medibank Private and ahm, cover around 5 million people. Medibank and Australia's fourth-largest health fund NIB Holdings are the only listed health insurers. In addition to private health insurance, the firm provides life, pet, and travel insurance, as well as health insurance for overseas students and temporary overseas workers. The Medibank Health division provides healthcare services to businesses, governments, and communities across Australia and New Zealand. Delving into Medibank Private Ltd's Dividend Performance: A Comprehensive Analysis

Medibank Private Ltd's Dividend History

Medibank Private Ltd has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends. Delving into Medibank Private Ltd's Dividend Performance: A Comprehensive Analysis

Medibank Private Ltd's Dividend Yield and Growth

As of today, Medibank Private Ltd currently has a 12-month trailing dividend yield of 4.71% and a 12-month forward dividend yield of 5.04%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Medibank Private Ltd's annual dividend growth rate was 1.30%. Extended to a five-year horizon, this rate remained the same.



Based on Medibank Private Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Medibank Private Ltd stock as of today is approximately 5.02%. Delving into Medibank Private Ltd's Dividend Performance: A Comprehensive Analysis

The Sustainability of Medibank Private Ltd's Dividends

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Medibank Private Ltd's dividend payout ratio is 0.73, which may suggest that the company's dividend may not be sustainable.

Medibank Private Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Medibank Private Ltd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.

Medibank Private Ltd's Growth Metrics

To ensure the sustainability of dividends, a company must have robust growth metrics. Medibank Private Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.

Revenue is the lifeblood of any company, and Medibank Private Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Medibank Private Ltd's revenue has increased by approximately 3.40% per year on average, a rate that underperforms approximately 55.24% of global competitors.

The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Medibank Private Ltd's earnings increased by approximately 17.40% per year on average, a rate that underperforms approximately 26.5% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 2.00% underperforms approximately 59.86% of global competitors.

Conclusion

In conclusion, Medibank Private Ltd's consistent dividend payments, reasonable growth rate, and good profitability indicate a potentially rewarding investment. However, the relatively high payout ratio and underperformance in revenue and earnings growth compared to global competitors suggest caution. Investors should continue to monitor these factors to make informed decisions.

GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article first appeared on GuruFocus.