Why the CSR share price is backtracking today

What’s driving CSR shares lower on Friday?

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Key points

  • CSR shares backtrack 2.25% to a fresh 52-week low of $4.79 
  • The company's shares are trading ex-dividend today 
  • Eligible shareholders will receive a payment of 18 cents per share on 1 July 

CSR Limited (ASX: CSR) shareholders might be wondering why the share price is falling 2.25% to $4.79 today.

The building products company released its full year results on 11 May, reporting solid growth across key financial metrics.

Nonetheless, the board opted to ramp up its upcoming final dividend to eligible investors.

Let’s take a look below at why CSR shares are falling during early morning trade.

Shareholders set eyes on CSR’s final dividend

The CSR share price is in reverse after trading ex-dividend today.

This means if you didn’t purchase the company’s shares before this date, the upcoming dividend will go towards the seller.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out.

If you’re wondering why, eligible shareholders tend to quickly offload after securing the dividend, looking for other alternative investments.

In addition, the company’s value is worth a tad less after paying out a portion of its profits to shareholders.

When can shareholders expect to be paid?

For those eligible for CSR’s final dividend, shareholders will receive a payment of 18 cents per share on 1 July.

The dividend is also 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.

Also, investors who elect for the dividend reinvestment plan (DRP) will see a number of shares added to their portfolio. This will be based on a 10-day volume weighted average price from 6 June to 20 June.

There is no DRP discount rate and the last election date for shareholders to opt-in is on 31 May.

CSR share price summary

Since the beginning of 2022, CSR shares have lost 16% on the back of weakened investor sentiment following inflationary movements.

Notably, CSR shares are touching a 52-week low of $4.79 today.

In comparison, the S&P/ASX 200 Index (ASX: XJO) surged in the earlier months of 2022, but has reversed its gains.

The ASX 200 benchmark index remains relatively flat year to date.

Based on valuation grounds, CSR commands a market capitalisation of roughly $2.41 billion, and has a trailing dividend yield of 5.51%.

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 Scott Phillips.

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