Today is the day that Medibank Private pays its first dividend
payment of 5.3c per share which is fully franked at 100%. Medibank has over
400,000 shareholders that will receive this dividend payment. Currently
Medibank doesn’t offer a dividend reinvestment plan so instead of automatically
reinvesting my dividends like I normally would I expect to receive a cash dividend
payment of $165.625. Medibank expects to pay out $146 million dollars according
to its annual report to shareholders so I would expect like myself that many other
investors will be looking at topping up there current holdings or looking for a
new company to invest in.
According to the ASX website Medibank is trading with a yield
of only 2.23%. This figure doesn’t take into account the dividend payments that
were paid to the Australian federal government for its share of the company
before being sold. So I would expect the dividend yield of Medibank will raise
over the next year due to all dividends now going to ordinary shareholders and
the increasing profits at Medibank.
Although Medibank hasn’t been listed for a year yet (Around
11 months) it is currently sitting at a return of 21% before the dividend
payment for shareholders that purchased at the float price of $2.00 a share. So
with dividends included is returning around 23.23% in its first year which I
would love for all my stocks to achieve every year. Along with other past
government floats like Commonwealth Bank (CBA.AX) and CSL Limited (CSL)
Medibank is looking like a great investment but only time will tell if it can achieve
the kind of returns that Commonwealth and CSL have achieved over time.
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