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Why the Woolworths share price fell today

The Woolworths Group Ltd (ASX: WOW) share price dropped 1% to $36.38 today, but there’s no need for shareholders to worry as the supermarkets giant went without the rights to its 57 cents per share dividend yesterday. Commonly when a blue-chip shares favoured by investors for its dividend payments the share price will lose roughly the value of the dividend payment on the day it goes ex-dividend. 

For example yesterday Woolies shares lost 53 cents which is almost exactly in line with the dividend amount. Some traders will even try to dividend strip share by buying them just before the ex-dividend date to collect the dividend before selling them at a net profit. This is dangerous game to play though as often the shares will fall more than the dividend amount and you must hold the shares for 45 days to qualify for the franking credit. That’s before you account for the brokerage costs to buy and sell.

Other shares to go ex-dividend today include Medibank Private Ltd (ASX: MPL) and Treasury Wine Estates Ltd (ASX: TWE).

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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