Why the News Corp (ASX:NWS) share price is edging lower today

The global media company's shares are trading ex-dividend.

| More on:
a newsboy wearing historical costume of peaked cap and braces yells into an old fashioned megaphone while holding a newspaper in one hand, a so-called newsboy of previous eras when newsboys sold newspapers on street corners.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • News Corp shares are edging 0.9% lower to $29.65 in early trade
  • The company's shares are trading ex-dividend
  • Shareholders can expect to receive a dividend payment on 13 April

The News Corp (ASX: NWS) share price is heading south during early Tuesday trading.

This comes despite the media giant not releasing any market-sensitive news today.

At the time of writing, News Corp shares are down 0.9% to $29.65 apiece.

Why are News Corp shares falling today? 

Following the company's second-quarter and half-year results released on 4 February, investors are eyeing News Corp 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 News Corp 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 News Corp shareholders?

For those eligible for News Corp's interim dividend, shareholders will receive a payment of 9.83 cents per share on 13 April. Although, the dividend is unfranked, which means investors won't receive any tax credits from this.

The dividend is slightly higher when compared against the prior corresponding period despite recording lower free cash flow.

Management said the decline was primarily due to lower cash provided by operating activities and higher capital expenditures.

Are News Corp shares a buy now?

Following the company's financial scorecard, a couple of brokers weighed in on the News Corp share price.

The team at Macquarie raised its 12-month price target by 16% to $50.00 for the media company's shares. Its analysts believe there is still more upside in News Corp shares in line with its sound performance recently.

Based on the current share price, this implies an upside of about 67% for investors.

Furthermore, UBS also lifted its rating on News Corp shares by 2.4% to $42.50 a pop. This also implies an upside of around 42% from where the company trades today.

News Corp shares price summary

Since the beginning of 2022, News Corp shares have lost more than 4% on the back of weak investor sentiment on the ASX.

The company's shares reached a 52-week low of $28.18 last week, before rebounding slightly higher thereafter.

On valuation grounds, News Corp commands a market capitalisation of around $1.36 billion, with approximately 45.32 million shares outstanding.

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.

More on Dividend Investing

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Dividend Investing

5 top ASX dividend shares to buy right now

Analysts think income investors should be loading up on these shares.

Read more »

Two adults and a child look happy as they walk through airport with child sitting on suitcase.
Dividend Investing

Will Qantas shares pay a dividend in 2024?

Will the dividends return this year? Let's find out.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Dividend Investing

2 market-leading ASX dividend stocks to buy in April

Analysts have put buy ratings on these market-leaders.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Man holding Australian dollar notes, symbolising dividends.
ETFs

Want the latest dividend from the Vanguard Australia Shares ETF (VAS)? Here's what you have to do

If you want to bag the latest VAS dividend, here's what you need to do.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Dividend Investing

Investing for passive income? Keep any eye out for that boosted Telstra dividend today!

If you own Telstra shares, keep an eye out for that juicy dividend payout today.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Invest $12,000 in Woodside stock and get $5,700 in passive income

Reliable dividend shares are everywhere on the ASX. Here's how you could use that to your advantage.

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
Dividend Investing

3 ASX 300 dividend shares to buy in April

These shares have been named as buys by brokers and tipped to offer very attractive yields.

Read more »