Medibank (MPL.ASX) is now trading at a price level that warrants attention. The stock is forecast to pay a fully franked dividend in FY17 of $0.12, placing the stock on a forward yield of 4%+.
We don’t see too much in the way of earnings growth with forecast NPAT in FY17 being similar to FY16, in or around $430m on EPS of $0.16.
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The stock is approaching an oversold level and may see a small bounce, otherwise we’re likely to see sideways consolidation at or $2.50 – $2.60 at which time longer term holders should sell covered calls.
For the trader, deeper selling from today’s price will provide an entry level with a likely bounce back to the above stated target range.
