Why is the Bank of Queensland (ASX:BOQ) share price plunging today?

The bank is trading ex-dividend today. Here are the details

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Man in a business suit hangs in mid air facing the floor as he plunges to the ground.

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The S&P/ASX 200 Index (ASX: XJO) is having a disappointing day of trading so far. At the time of writing, the ASX 200 has slipped 0.21% and is sitting at 7,433.1 points. But the Bank of Queensland Limited (ASX: BOQ) share price is faring far worse. It’s presently trading at $8.98 a share, down 2.5% from where it closed at yesterday.

That’s some significant underperformance from Bank of Queensland today, with the company down multiples more than the broader market. So what’s going on here?

Luckily for Bank of Queensland shareholders, there’s not much to panic about today. This seemingly steep plunge is not the result of any bad news or sentiment shift. Rather, it’s likely due to this bank trading ex-dividend today.

Yesterday was the last day new Bank of Queensland shareholders were eligible to receive the company’s upcoming final dividend. New shareholders from today won’t be so lucky. That’s why we are likely seeing a drop in the Bank of Queensland share price today. The value of this dividend has ‘left the building’, as it were.

Eligible shareholders will be receiving Bank of Queensland’s final dividend payment of 22 cents per share, fully franked, on 18 November. Shareholders should be pleased with this dividend, seeing as it’s worth a lot more than both Bank of Queensland’s last interim dividend of 17 cents a share, and its last final dividend payout before that of 12 cents a share.

This dividend hikes Bank of Queensland’s trailing dividend yield to 4.37%, or 6.24% grossed-up with those full franking credits. If you annualise this upcoming dividend, we get a hypothetical yield of 4.93% (7.04% grossed-up).

Bank of Queensland share price snapshot

The Bank of Queensland share price has been on struggle street lately. This ASX bank is currently down around 5% over the past month alone and is also down around 2% over the past 6 months.

However, it remains up about 19% year to date in 2021 and up around 44% over the past 12 months. Those last two figures trump the ASX 200, which is up around 11% year to date and 22% over the past 12 months.

At the current Bank of Queensland share price, this ASX bank has a market capitalisation of $5.9 billion.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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