Advertisement
U.S. markets open in 2 hours 38 minutes
  • S&P Futures

    5,306.00
    -2.25 (-0.04%)
     
  • Dow Futures

    40,143.00
    -1.00 (-0.00%)
     
  • Nasdaq Futures

    18,495.00
    -8.75 (-0.05%)
     
  • Russell 2000 Futures

    2,136.70
    -1.70 (-0.08%)
     
  • Crude Oil

    82.07
    +0.72 (+0.89%)
     
  • Gold

    2,231.10
    +18.40 (+0.83%)
     
  • Silver

    24.83
    +0.07 (+0.29%)
     
  • EUR/USD

    1.0794
    -0.0035 (-0.32%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    12.97
    +0.19 (+1.49%)
     
  • dólar/libra

    1.2620
    -0.0018 (-0.15%)
     
  • USD/JPY

    151.3850
    +0.1390 (+0.09%)
     
  • Bitcoin USD

    70,615.14
    +614.62 (+0.88%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,956.81
    +24.83 (+0.31%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Should Income Investors Buy Medibank Private Limited (ASX:MPL) Before Its Ex-Dividend?

Attention dividend hunters! Medibank Private Limited (ASX:MPL) will be distributing its dividend of AU$0.072 per share on the 27 September 2018, and will start trading ex-dividend in 2 days time on the 05 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Medibank Private’s latest financial data to analyse its dividend attributes.

See our latest analysis for Medibank Private

5 checks you should do on a dividend stock

If you are a dividend investor, you should always assess these five key metrics:

  • Is it paying an annual yield above 75% of dividend payers?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has dividend per share risen in the past couple of years?

  • Does earnings amply cover its dividend payments?

  • Will the company be able to keep paying dividend based on the future earnings growth?

ASX:MPL Historical Dividend Yield September 2nd 18
ASX:MPL Historical Dividend Yield September 2nd 18

Does Medibank Private pass our checks?

The current trailing twelve-month payout ratio for the stock is 78.6%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 78.9%, leading to a dividend yield of around 4.2%. Moreover, EPS should increase to A$0.17.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Medibank Private as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

Relative to peers, Medibank Private generates a yield of 4.2%, which is high for Insurance stocks but still below the market’s top dividend payers.

Next Steps:

Whilst there are few things you may like about Medibank Private from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three important factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for MPL’s future growth? Take a look at our free research report of analyst consensus for MPL’s outlook.

  2. Valuation: What is MPL worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether MPL is currently mispriced by the market.

  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Advertisement