Why is the Soul Pattinson (ASX:SOL) share price sliding lower today?

What’s happened to Soul Patts shares?

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The Washington H Soul Pattinson & Co Ltd (ASX: SOL) share price is sinking on Friday morning. This comes as shares in the Australian investment house are trading ex-dividend.

At the time of writing, Soul Patts shares are down 1.92% to $30.65. It’s worth noting that its shares have now fallen by more than 11% in the past month alone.

Why are Soul Patts shares falling today? 

With the company’s full-year results released in September, investors are eyeing Soul Patts shares as they go ex-dividend today.

Typically, one business day before the record date, the ex-dividend date, is when investors must have purchased shares. If the investor does not buy Soul Patts 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.

What does this mean for Soul Patts shareholders?

For those eligible for the Soul Patts’ final dividend, shareholders will receive a payment of 36 cents per share on 14 December. The dividend is fully franked, which means investors can expect to receive tax credits from this.

Together with the interim dividend, the full-year dividend comes to 62 cents per share. This represents 82% of net cash flows from investments received in FY21.

Soul Patts has continued to lift its dividends every year for the last 20 years. The full-year dividend reflects a 3% increase on the prior corresponding period (FY20)

Soul Patts share price summary

Since the beginning of 2021, Soul Patts shares have gained just 2.4% following a continued downtrend in recent months. The S&P/ASX 200 Index (ASX: XJO) is up around 12% over the same timeframe.

The Soul Patts share price reached an all-time high of $40.80 in late September, before plummeting after the company’s full-year results.

Based on today’s price, Soul Patts commands a market capitalisation of roughly $11.27 billion.

Motley Fool contributor Aaron Teboneras 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 owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. 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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