Why is the Brickworks share price sliding on Monday?

What’s going on with the Brickworks share price?

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Key points

  • Brickworks shares backtrack 0.88% to $23.71 
  • The company's shares are trading ex-dividend today 
  • Eligible shareholder will receive a dividend payment of 22 cents on 3 May 

Brickworks Limited (ASX: BKW) shareholders might be wondering why the share price has fallen 0.88% to $23.71 today.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is rising to 7,487.7 points, up 0.13%.

The building products company released its half-year results on 24 March, reporting strong growth across key financial metrics.

In turn, the board opted to increase its upcoming interim dividend to eligible investors.

Let’s take a look below at why Brickworks shares are edging lower during early afternoon trade.

Shareholders set eyes on Brickworks’ interim dividend

The Brickworks share price is in reverse following the company’s shares trading ex-dividend today.

Typically, one business day before the record date, the ex-dividend date, is when investors must have purchased the company’s shares. If the investor does not buy Brickworks shares before this date for example, 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 Brickworks’ interim dividend, shareholders will receive a payment of 22 cents per share on 3 May. The dividend is fully franked.

Franking credits or otherwise known as imputation credits are highly regarded in the investing world. This is a type of tax credit that is passed onto shareholders when dividend payments are made by a company. Essentially, the company is paying the tax on the dividends received by the shareholders.

In case you are wondering, the company is not offering a dividend reinvestment plan (DRP) to shareholders.

Brickworks share price summary

Since this time last year, Brickworks shares have gained around 13% on the back of positive investor sentiment. The S&P/ASX 200 Index (ASX: XJO) is also up around 7% over the same timeframe.

Brickworks shares reached an all-time high of $26.32 in mid-September 2021, before backtracking amid inflationary movements and geopolitical tensions.

Based on today’s price, Brickworks commands a market capitalisation of roughly $3.59 billion and has a trailing dividend yield of 2.58%.

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. owns and has recommended Brickworks. The Motley Fool Australia owns and has recommended Brickworks. 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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