Here’s why the Woolworths (ASX:WOW) share price is sliding today

While Woolworths’ half-year earnings were a mixed bag, investors are set to bank on the upcoming dividend.

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Key points

  • Woolworths delivered a sub-par performance for its Fy22 first half result
  • The board declared an interim dividend of 39 cents per share
  • Eligible shareholders can expect to receive payment on 13 April

You may be wondering why the Woolworths Group Ltd (ASX: WOW) share price is backtracking today.

With the earning seasons wrapped up for most of the S&P/ASX 200 Index‘s (ASX: XJO) shares, Woolworths is trading ex-dividend.

This comes after the retail conglomerate released its half-year scorecard on 23 February, reporting mixed numbers across key financial metrics.

Nonetheless, the board opted to slash its upcoming interim dividend by 26.4% over the prior corresponding period.

At the time of writing, the company’s shares are down 1.44% to $34.73.

Below we take a closer look at Woolworths’ latest dividend and when shareholders can expect payment.

Shareholders set eyes on Woolworths interim dividend

Following the company’s half year results, investors are eyeing Woolworths 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 Woolworths 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.

When can shareholders expect to be paid?

For those eligible for Woolworth’s interim dividend, shareholders will receive a payment of 39 cents per share on 13 April. The dividend is fully-franked at a corporate tax rate of 30%, which means investors will receive tax credits from this.

In addition, investors can elect for the dividend reinvestment plan (DRP) which will add a portion of shares to their portfolio instead. This will be based on a 10-day volume-weighted average price from 8 March to 21 March.

There is no DRP discount rate and the last election date for shareholders to opt-in is on 7 March.

Under the company’s capital management framework, there is typically a 70% to 75% dividend payout.

Woolworths share price summary

Since the beginning of 2022, Woolworths shares have lost 7% on the back of weakened investor sentiment. The benchmark ASX 200 index is also down around 4.4% over the same timeframe.

Woolworths shares reached a 52-week low of $33.45 last month, before moving in circles over the following weeks.

Based on today’s price, Woolworths commands a market capitalisation of roughly $42.71 billion and has a trailing dividend yield of 3.06%.

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 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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