Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Medibank (MPL) and NIB Holdings (NHF) Lead ASX 200 Higher

Private health insurers Medibank Private Ltd (ASX: MPL) and NIB Holdings Ltd (ASX: NHF) are leading the ASX 200 (INDEXASX: XJO) higher, each up 10% this morning.

About Medibank and NIB

NIB Holdings and Medibank Private are two of Australia’s largest private health insurers. Medibank operates the low-cost ahm brand, whilst NIB operates the corporate health insurer GU Health Insurance.

Premiums and Dividends

These two companies have risen today as a result of the Coalition winning the election over the weekend. Prior to the election, Labor had proposed policies regarding the premiums that health insurers could charge. They proposed to limit premium increases to 2% per year for the next two years.

Had this gone ahead, this could have pressured what are already tight margins for the health insurers. For context, the average industry premium increase in 2019 was 3.25%.

Although Labor’s plan will now not go ahead, it should be noted that NIB and Medibank’s most recent premium increases were the lowest they had been in 16 and 18 years respectively. The need for affordability is still putting pressure on health insurers and may mean that premium increases will be low for the foreseeable future.

Medibank and NIB also offer fully franked dividend yields of 4.4% and 3.5% respectively. As with the banks, these two companies are also likely being boosted by the fact that franking credits will not be changed.

With these factors combined, Medibank and NIB have experienced the largest rise on the ASX 200 today.

Are They a Buy?

As mentioned, premium increases are currently the lowest they have been for some time, so although they may not be capped at 2%, growth may still be lower than it has been for the last decade. These two companies may make a good investment for dividend income, but I think there are better options for growth shares.

For two growth share ideas, check out the companies in the free report below.

[ls_content_block id=”18457″ para=”paragraphs”]

Disclosure: At the time of writing, Max does not own shares in any of the companies mentioned.

 

 

 

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content