The Insurance Australia Group Ltd (ASX: IAG) share price is in the woes this morning. The stock is falling 1.9% to trade at $4.74.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is in the green, lifting 0.14%.
But there's a simple explanation behind the IAG share price's slump. The insurance giant is trading ex-dividend.
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IAG stock slumps 2% on ex-dividend date
I've got bad news for anyone still on the fence about buying IAG stocks for the company's upcoming dividend.
As of yesterday's close, new investors buying into the stock won't receive the payout. It will instead go to the stock's former owner.
And the IAG share price is falling in turn. That's because the market can no longer factor the 6 cents per share offering into the value of its stock.
IAG announced the 30% franked dividend on Monday alongside its earnings for the first half of financial year 2023.
It posted a $468 million net profit after tax (NPAT) – a 171% year-on-year improvement, while its gross written premium lifted 7.5% to around $7.1 billion.
Meanwhile, the 6 cents per share dividend was flat on its previous interim offering. Though, this time it's fully franked at 30%.
Considering its newly declared dividend alongside its previous full-year offering, IAG shares boast a 2.3% dividend yield at their current price.
But eager investors might want to hedge their excitement for now.
The payout won't be paid out until 23 March – meaning they still have six weeks to wait before seeing the distribution.
IAG share price snapshot
The IAG share price has been underperforming in recent times.
The stock has gained 2% this year while the ASX 200 has leapt 6%.
Looking further back, IAG shares have risen around 1% since this time last year – in line with the index's performance.
