It's been a bouncy, yet overall negative day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At present, the ASX 200 has fallen by a tentative 0.058% and is trading at just above 6,850 points.
But let's talk about the Nickel Industries Ltd (ASX: NIC) share price.
Nickel Industries shares closed at 92.5 cents each yesterday. The nickel producer opened at 92 cents this morning and is currently trading down a chunky 3.03% at 89.5 cents per share.
But shareholders shouldn't get too disappointed by this seemingly nasty fall. For Nickel Industries shares are dropping today for one of the best reasons to have an ASX share fall in value. Nickel Industries is now trading ex-dividend for its upcoming interim dividend payment.
As we covered last month, 31 August saw Nickel Industries report its half-yearly earnings. The company reported a pleasing 43% rise in profit after tax to US$118.4 million, as well as a 37% increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) to $126.9 million.
Nickel Industries share price falls as ex-dividend date arrives
The earnings enabled Nickel Industries to declare an interim dividend of two cents per share, unfranked. This was consistent with the company's last final dividend payment, as well as the previous interim dividend from last year.
This dividend will hit investors' bank accounts later this month on 14 September.
When a company trades ex-dividend, it effectively cuts off any new investors from receiving the dividend payment. That is what has happened to the company today. As such, investors needed to hold Nickel Industries shares as of yesterday in order to be eligible for the payment.
Since, for all intents and purposes, Nickel Industries shares are less valuable today than they were yesterday for new investors, the company's shares have taken a hit in value. That is probably why we are seeing weakness in the Nickel Industries share price this Tuesday.
At the current Nickel Industries share price, this ASX 200 materials share has a dividend yield of 3.11%.
