Why the Rural Funds share price is falling today

Why is the Rural Funds share price tanking today? It’s not as bad as it looks.

| More on:
farm workers examine an agricultural crop

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

The All Ordinaries Index (ASX: XAO) is experiencing a bit of a pullback today. At the time of writing, the All Ords has slipped by 1.45% and is back below 6,900 points. But that pales in comparison to the Rural Funds Group (ASX: RFF) share price today.

Rural Funds shares are currently down a painful 3.47% to $2.64 each. That comes after the agricultural real estate investment trust (REIT) closed at $2.74 yesterday, but opened at $2.69 this morning.

So why is Rural Funds underperforming so dramatically today?

Why is the Rural Funds share price falling on Wednesday?

Well, it’s for one of the best reasons to have your shares fall in value. Today is the day that Rural Funds shares have traded ex-dividend for the REIT’s upcoming dividend distribution.

When an ASX share declares a dividend payment for shareholders, it also declares a date that new shareholders are excluded from being eligible to receive the upcoming payment. This is known as the ex-dividend date.

Seeing as new Rural Funds shareholders from today are ineligible for the company’s next payment, the payment’s value has left the Rural Funds share price. That is why we are seeing such an apparent drop in value for this REIT today.

So investors can now look forward to the quarterly dividend distribution of 2.93 cents per share that will be paid on 29 July next month. Rural Funds Group typically doles out four quarterly dividend distributions a year.

This upcoming payment will be the fourth to consist of a 2.93 cents per share payment. June 2021’s distribution was worth 2.82 cents per share, so this payment represents a 3.9% increase over the previous year.

At the current Rural Funds share price, this agricultural ASX REIT has a market capitalisation of $1.01 billion. Put together, the past four dividend distributions of 2.93 cents per share each now give Rural Funds a trailing yield of 4.44% at this pricing.

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 positions in and has recommended RURALFUNDS STAPLED. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

A businesswoman weighs up the stack of cash she receives, with the pile in one hand significantly more than the other hand.
Dividend Investing

Everything you need to know about the latest Telstra dividend

How big will the Telstra dividend be?

Read more »

Miner holding cash which represents dividends.
Dividend Investing

Do any ASX lithium shares pay dividends?

These three lithium shares offer regular payouts to investors.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Dividend Investing

Why is the Rio Tinto share price sinking today?

Why is this mining giant deep in the red today?

Read more »

Four investors stand in a line holding cash fanned in their hands with thoughtful looks on their faces.
Dividend Investing

Guess how much AGL has paid in dividends over the past 5 years?

Have AGL dividends held shareholders in good stead?

Read more »

A man in a business suit scratches his head looking at a graph that started high then dips, then starts to go up again like a rollercoaster.
Dividend Investing

‘Misunderstood’: Expert names dividend ASX share to buy now at price dip

Reliable income producers aren't easy to find. Here's a stock that is cheap enough to pick up at the moment…

Read more »

A woman has a thoughtful look on her face as she studies a fan of Australian 20 dollar bills she is holding on one hand while he rest her other hand on her chin in thought.
Dividend Investing

Analysts say these top ASX dividend shares are buys

Here are two top dividend shares analysts say are buys...

Read more »

A laughing woman pushes her friend in a supermarket trolley.
Broker Notes

Top broker tips Coles shares to pay 23% more dividends in FY23

The company's shareholders could be in for a good run.

Read more »

A blockchain investor sits at his desk with a laptop computer open and a phone checking information from a booklet in a home office setting.
Dividend Investing

Why is the AFIC share price sliding today?

Eligible AFIC shareholders will be rewarded later this month.

Read more »