Why is the Nick Scali (ASX:NCK) share price sliding 6% today?

Nick Scali shares look likely to finish the week in the red…

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A young woman lies on her lounge with a pink blanket covering her face and the top half of her body as she hides away from seeing the Nick Scali share price fall today

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Key points

  • Nick Scali shares are down 5.38% to $11.79
  • The company's shares are trading ex-dividend today
  • Nick Scali will pay shareholders 35 cents per share on 28 March

The Nick Scali Limited (ASX: NCK) share price is heading south during morning trade. This comes despite the company not releasing any market-sensitive news today.

At the time of writing, the furniture retailer’s shares are down 5.7% to $11.75.

Why are Nick Scali shares falling today? 

Following the company’s half-year results released last month, investors are eyeing Nick Scali shares as they go ex-dividend today.

This means if you purchased the company’s shares yesterday or before, you will be eligible for the latest dividend.

Traditionally, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors try to make a quick profit after securing the dividend.

What does this mean for Nick Scali shareholders?

For those eligible for Nick Scali’s interim FY22 dividend, shareholders will receive a payment of 35 cents per share on 28 March. The dividend is fully-franked, which means investors can expect to receive tax credits at tax time.

The dividend reflects a decline of 12.5% when compared against the prior corresponding period (40 cents per share).

Are Nick Scali shares a buy now?

Reflecting on the financial performance for the first half, analysts at Wilsons have weighed in on Nick Scali shares.

The broker raised its 12-month price target by 3.6% to $17.60 for the company’s shares. Wilson analysts believe that there is still more upside in the Nick Scali share price regardless of its mixed performance recently.

Based on the current share price, this implies an upside of about 49% for Nick Scali investors.

Nick Scali share price summary

Since the beginning of 2022, Nick Scali shares have fallen roughly 18% on the back of weakened investor sentiment. The company’s shares reached an all-time high of $16.30 in November, before backtracking thereafter.

Nick Scali commands a market capitalisation of roughly $1 billion and has a trailing dividend yield of 5.45%.

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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