Highlights

  • Helia's 22.38% trailing yield is mostly special-dividend driven, with 94c of the 126c trailing total classed as special.
  • Ordinary dividends of 32c imply a sustainable yield near 5.7% on the $5.63 share price, well below the headline figure.
  • Blended franking of about 71% lifts the grossed-up yield to 29.23%; special franking has varied between unfranked and 87%.
  • Helia reported FY25 statutory net profit of $244.9 million and paid out 100% of it, cutting its capital base by roughly $100 million.
  • Helia's largest contract, with Commonwealth Bank, was not renewed and will progressively reduce insurance revenue from 31 January 2026.

Why the dividend yield is attracting attention

A trailing dividend yield of 22.38% is an eye-catching number for any ASX-listed financial stock, and it has helped push Helia Group Limited (ASX:HLI), Australia's largest lenders mortgage insurance provider, high up the high-yield dividend scan as at 20 July 2026.

Such a high yield almost always has an explanation beyond ordinary earnings, and Helia is no exception. The company has been returning substantial surplus regulatory capital to shareholders through special dividends, on top of its ordinary payout.

For income-focused readers, the essential task is separating routine income from payments made because Helia was sitting on capital above its regulatory target, a distinction that determines whether a yield near 22% can realistically continue.

What changed?

Helia has been progressively returning surplus capital to shareholders as its prescribed capital amount (PCA) coverage ratio has run well above its target operating range of 1.40 to 1.60 times. At its FY25 results in February 2026, Helia reported a PCA coverage ratio of 2.03 times, prompting another large special dividend.

Alongside a fully franked 16 cent ordinary final dividend, the board declared a 67 cent special dividend, franked to 87%, both paid on 26 March 2026. That followed an August 2025 interim payment of 16 cents ordinary plus a 27 cent unfranked special. Together, the two payments total 126 cents over the trailing 12 months, driving the 22.38% headline yield on a $5.63 share price.

At the same time, Helia disclosed that its largest lending-partner contract, with Commonwealth Bank, will not be renewed, a structural change to its future revenue base that sits behind the capital-return strategy.

Why it matters

The composition of the yield matters because an investor buying Helia today at $5.63 is not entitled to another 94 cents of special dividends simply because that was paid last year; each special reflects a capital-management decision tied to a surplus PCA ratio that will not necessarily persist. Treating 22.38% as a repeatable income stream risks a significant downgrade once the capital base normalises and reduced Commonwealth Bank premium flows through to earnings.

How the dividend yield was calculated

Trailing dividend yield is calculated by summing every dividend paid in the prior 12 months, including specials, and dividing by the current share price. As at 20 July 2026 the inputs were a $5.63 share price and trailing dividends of 126 cents per share.

Those 126 cents comprise the FY25 interim dividend (16c ordinary plus a 27c special, ex-dividend 29 August 2025) and the FY25 final dividend (16c ordinary plus a 67c special, ex-dividend 10 March 2026). Dividing 126 cents by $5.63 produces 22.38%.

The grossed-up yield of 29.23% reflects franking credits at the blended 71% estimate. This is a trailing, historical calculation, not a forecast. Removing the 94 cents of special dividends leaves ordinary trailing dividends of 32 cents, a yield of about 5.7%.

Is a special dividend inflating the yield?

Yes—special dividends dominate the yield. Of the 126 cents used in the trailing calculation, 94 cents, or about 75%, is classified as special rather than ordinary.

Helia's board has been returning capital because its PCA coverage ratio, a regulatory solvency measure, has sat well above its 1.40 to 1.60 times target, reaching 2.03 times at FY25. Total FY25 dividends of 126 cents represented a 100% payout of statutory net profit plus a roughly $100 million reduction in Helia's capital base.

This is a deliberate capital-management program rather than an operating windfall. Because the driver is a shrinking capital surplus rather than growing earnings, Helia's repeatable dividend sits closer to the mid-single-digit ordinary yield, not near 22%, once the surplus capital has been distributed.

What the company does

Helia Group Limited is Australia's largest provider of lenders mortgage insurance (LMI), a product that protects mortgage lenders, not borrowers, against losses if a borrower defaults on a high loan-to-value-ratio home loan. Lenders typically require LMI when a borrower's deposit is below 20% of the property value.

Formerly Genworth Mortgage Insurance Australia, the company rebranded to Helia in 2021. It writes LMI policies in partnership with major banks and non-bank lenders across Australia, earning premium income recognised over the life of each insured loan.

Helia's revenue is heavily concentrated among a small number of large lending-partner relationships, which is why the loss of any single major bank contract, as with Commonwealth Bank, has an outsized effect on future premium volumes.

Latest financial performance

For FY25, Helia reported statutory net profit after tax of $244.9 million, up 5.8% on FY24, while underlying net profit rose 12% to $247.0 million. Insurance revenue fell 5% to $371.5 million, reflecting lower average premium rates and legacy-book run-off, even as gross written premium grew on solid housing credit demand.

Half-year results in August 2025 showed net profit after tax of $133.7 million, up 38%. FY26 insurance revenue guidance of roughly $320 million to $370 million already reflects the anticipated Commonwealth Bank reduction.

Helia's balance sheet remains strong: the FY25 PCA coverage ratio of 2.03 times sits above the 1.40 to 1.60 times target, and net tangible assets stood at $5.48 per share, with underlying return on equity of 23.5%. Confirm the latest capital position against Helia's official reports, as this determines how much further special capital remains available.

What could support future dividends?

Several factors could support Helia's ordinary dividend even as the special-dividend program winds down. The core LMI business continues to generate recurring premium income across a diversified panel of bank and non-bank lending partners beyond Commonwealth Bank, and housing credit growth has remained solid, lifting gross written premium.

Helia's capital position remains well above regulatory minimums even after successive special dividends, giving the board flexibility to keep funding an ordinary payout. A 100% statutory profit payout ratio in FY25 shows management's preference for returning surplus capital, supportive provided earnings hold up.

What could threaten future dividends?

The most direct threat is the non-renewal of Helia's Commonwealth Bank contract, worth roughly 44% of FY24 gross written premium and about $105 million of FY25 GWP. Impacts on insurance revenue will emerge progressively from 31 January 2026, and FY26 guidance already reflects a step down.

Beyond CBA, Helia has also flagged the anticipated loss of its ING mortgage insurance arrangement, adding to concentration risk in a business reliant on a handful of large lending partners. A softer housing or credit cycle, or greater lender use of alternative risk-transfer arrangements, would pressure future premium volumes.

Because the trailing yield is inflated by special dividends tied to a shrinking capital surplus, investors risk overstating the sustainable payout. Once the PCA ratio normalises, specials should shrink or stop, leaving the ordinary dividend as the realistic base case. A recent CEO transition to Mark Senkevics adds execution uncertainty.

Franking credits and grossed-up income

Franking credits are a feature of Australia's dividend imputation system. When a company pays corporate tax and distributes a franked dividend, it passes on credits for tax already paid, which eligible Australian shareholders can use to offset their own tax liability or, in some cases, receive as a refund.

Helia's ordinary dividends have been fully franked, but its special dividends have varied: the August 2025 interim special of 27 cents was unfranked, while the March 2026 final special of 67 cents was franked to 87%. the data shows blended trailing franking of about 71% across the four payments, producing the 29.23% grossed-up yield on the 22.38% cash yield.

Large, repeated special dividends can draw down a franking account balance over time, which may explain the lower franking on the earlier payment. The value of franking depends on an investor's tax position; this article is not personal tax advice, so confirm franking on each dividend against Helia's own statements.

What investors may monitor next

Income-focused readers may wish to watch several markers. The first is Helia's FY26 half-year result, expected around August 2026, which should show early signs of reduced Commonwealth Bank-related premium and how the ordinary dividend tracks against the 16 cent per half base.

The second is Helia's PCA coverage ratio: as it moves back toward its 1.40 to 1.60 times target, special dividends should shrink, sharply reducing the trailing yield even without share price movement. The third is progress replacing lost lender volume, CEO commentary, and the ING contract outcome.

Balanced conclusion

Helia Group's 22.38% trailing yield is factually accurate, but it is largely a product of capital-management decisions rather than ordinary earnings power. Roughly 94 cents of the 126 cents in trailing dividends came from special distributions funded by a PCA coverage ratio running well above target, a surplus not necessarily replenished at the same pace.

Viewed on an ordinary basis, Helia looks like a mid-single-digit-yield LMI insurer facing a structural headwind from the loss of its largest bank contract, alongside a strong capital position and a newly appointed CEO. None of this makes Helia a buy or a sell; income investors should treat the trailing yield as a rear-view figure and base any decision on the sustainable ordinary dividend, the pace of capital normalisation, and their own advice.