Here's why the AGL share price is dipping on Wednesday

Investors might be happy AGL shares are falling today. Here's why.

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published February 22, 2023 12:40 pm AEDT

To start with, most ASX 200 shares are having a rough time today. At present, the S&P/ASX 200 Index (ASX: XJO) is down by 0.43% at around 7,300 points. But the AGL Energy Limited (ASX: AGL) share price is seemingly having a worse day than most.

AGL shares closed at $6.95 yesterday. But today, the ASX 200 energy generator and retailer opened at $6.93 a share and has fallen down to $6.88. That's a drop of just over 1% – more than double the falls of the broader market.

But it's not as bad as it looks. AGL shares are falling today for one of the best reasons to have an ASX 200 share fall in value – the company has just traded ex-dividend.

A wallet with a one hundred dollar bill poking out sits on top of an electricity meter with the numbers rapidly going up, representing power prices in Australia rising as we ponder whether the Origin Energy share price will go up as a result — Image source: Getty Images

AGL share price falls as investors book in dividend

Earlier this month, AGL announced its latest earnings to the market, covering the first half of FY2023. As we covered at the time, it was a fairly brutal report for shareholders to read.

AGL reported that its underlying net profit after tax (NPAT) fell by a horrendous 55% from the previous year to $87 million for the half. And AGL revealed that it would be bringing home a statutory loss after tax of $1.1 billion.

The company's dividends did not get through unscathed either. This year's interim dividend comes in at 8 cents per share, unfranked. That's a 50% cut from last year's 16 cents per share dividend.

So today, AGL shares have traded ex-dividend for said shareholder payment. This means that any new investors in AGL from today are not eligible to receive this latest dividend.

As such, the value of this payment has now left the AGL share price, which is probably why we are seeing the shares lose a big chunk of value on the share market today.

This latest dividend from AGL brings its total payouts for the past 12 months to an unfranked 18 cents per share. That gives the AGL share price a dividend yield of 2.62% right now.

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