The ResMed Inc (ASX: RMD) share price is treading higher on Wednesday morning. This comes despite the medical device company not releasing any market-sensitive news today.
At the time of writing, ResMed shares are up 0.65% to $35.47 apiece. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up just 0.17% to 7,446.8 points.
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Why are ResMed shares rising today?
With the company's first-quarter results released late last month, investors are eyeing ResMed shares as they go ex-dividend today.
Typically, one day before the record date, the ex-dividend date, is when investors must have purchased shares. If the investor does not buy ResMed shares before this date, the dividend will go to the seller.
Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company's shares after securing the dividend. However, it appears investors believe the ResMed share price is undervalued, sending it higher today.
What does this mean for ResMed shareholders?
For those eligible for ResMed's first-quarter dividend, shareholders will receive a payment of 42 cents per share on 16 December. The dividend is not franked however, which means investors will miss out on the imputed tax credits.
The quarterly dividend reflects an increase of 8% when compared against the prior corresponding period (Q1 FY21).
Are ResMed shares a buy now?
Following the company's scorecard for the new financial year, a number of brokers weighed in on ResMed shares.
Multinational investment bank Goldman Sachs raised its 12-month price target by 3% to $37.20 for the healthcare company. Macquarie soon followed, adding 1.3% to its outlook of $38 per share.
However, the most recent note came from Morgan Stanley, which lifted its price on ResMed shares by 3% to $37.30.
ResMed share price summary
Since the beginning of 2021, ResMed shares have gained 30% on the back of positive investor sentiment. The S&P/ASX 200 Health Care Index (ASX: XHJ) is up around 12% over the same timeframe.
Based on today's price, ResMed commands a market capitalisation of roughly $65 billion, and has approximately 406 million shares outstanding.
