Here’s why the GrainCorp share price is shedding 6% today

GrainCorp shares are trading without rights today.

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Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.

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Key points

  • GrainCorp shares sink 6.12% to $8.59 after going ex-dividend today
  • Eligible shareholders will receive a total dividend payment of 24 cents on 21 July
  • Regardless of today's steep decline, GrainCorp shares are up around 70% since this time last year

The GrainCorp Ltd (ASX: GNC) share price is heading south in early trade on Wednesday morning, despite no company announcements.

At the time of writing, shares in the Australian agribusiness are down 6.12% to $8.59

Why are GrainCorp shares in reverse today? 

Following the company’s half-year results released on 11 May, investors are eyeing GrainCorp 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 did not buy GrainCorp shares before this date, the dividend will go to the seller.

What does this mean for GrainCorp shareholders?

For those eligible for GrainCorp’s dividend, shareholders will receive a payment of 24 cents per share on 21 July. The dividend is fully franked and comprises a 12 cent interim dividend and a 12 cent special dividend.

The interim dividend reflects a 50% increase compared to the prior corresponding period (8 cents per share).

And in case you weren’t aware, the 24 cent total dividend is the largest dividend that has been paid by the company since 2013.

Are GrainCorp shares a buy now?

Following the company’s financial scorecard, one broker weighed in on the GrainCorp share price.

According to ANZ Share Investing, the analyst team at Wilsons cut its price target by 9.4% to $8.80 for the grain exporter’s shares. The team believes that GrainCorp shares are fully valued for the time being.

Based on today’s price, this is roughly in line with where the company’s shares are currently trading.

GrainCorp share price snapshot

Looking at the past 12 months, the GrainCorp share price has accelerated 70% on the back of favourable trading conditions.

In contrast, the S&P/ASX 200 Consumer Staples (ASX: XSJ) sector has risen by around 2% over the same timeframe.

GrainCorp shares reached an all-time high of $10.86 in May, before backtracking amid inflationary movement and cost of living pressure.

The company commands a market capitalisation of roughly $2.09 billion, and has a dividend yield of 1.93%.

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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