Why is the Premier Investments share price falling today?

Why are shares in the fashion retail investor falling today when the ASX 200 is up?

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Key points

  • The Premier Investments share price is down 3.38% in morning trade on Tuesday
  • This is despite the S&P/ASX 200 Index gaining so far today
  • Shares in the fashion retail investor have gone ex-dividend today

At last, it’s a green day for ASX shares so far in this Tuesday’s trading session. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has gained a healthy 1.12% and is now back over 6,500 points. But no one seems to have told the Premier Investments Limited (ASX: PMV) share price.

Premier Investments shares have fallen steeply today. This ASX 200 retailer and owner of the Smiggle, Peter Alexander, and Just Jeans brands closed at $20.12 a share yesterday but the company’s share price is down a hefty 3.38% so far today at $19.44 a share.

So why are Premier Investments shares defying the market so decisively today?

Why is the Premier Investments share price plunging 3.38% today?

Well, it’s not as bad as you might think. There’s a good reason Premier Investments is falling today. It has to do with this retailer’s next dividend.

Yes, today is the day that Premier Investments is going ex-dividend. The company is set to pay out its interim dividend for FY2022 on 27 July next month. But if an investor wants to see this dividend arrive in their bank accounts, they would have had to own the shares before today.

An ex-dividend date cuts off new investors from receiving a dividend, which means yesterday was the last day new Premier Investments investors could sign up. Since the value of this upcoming dividend is now unavailable, its value has effectively left the Premier Investments share price. That is why we are seeing this company drop by such a solid amount today.

So investors who were on the books before today can now look forward to receiving the company’s interim dividend of 46 cents per share, fully franked, on 27 July.

It’s going to be a fairly lucrative dividend for investors too. The 46 cents per share is a marked increase on last year’s interim dividend of 34 cents per share. It’s also steady on the company’s last final dividend of 46 cents per share that was paid out back in January.

These dividends now give Premier Investments shares a dividend yield of 4.7% on the current share price.

Motley Fool contributor Sebastian Bowen 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 recommended Premier Investments Limited. 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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