Here's why the South32 share price is being hammered today

South32's next dividend is on its way.

| More on:
Oil miner holding a laptop and mobile phone looks at his phone and sees the falling oil price and falling Woodside share price

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

Key points

  • The ASX 200 is having a shaky start to Thursday's session
  • But the South32 share price is getting particularly hard hit
  • But investors shouldn't be worried, here's why...

It's been a bumpy day for the S&P/ASX 200 Index (ASX: XJO) so far this Thursday. After opening sharply lower this morning, the ASX 200 rebounded into positive territory but has since slipped back into the red, currently down by 0.02%. But let's talk about the South32 Ltd (ASX: S32) share price.

This ASX 200 resources share is getting hammered today. South32 closed at $4.53 a share yesterday, but opened at $4.50 a share this morning and is trading at $4.46 at the time of writing, down a seemingly nasty 1.55%.

So what's going on with South32 shares today that would explain this pointed market underperformance?

Well, this loss is due to what is a pretty good reason to have your shares fall in value. South32 has just traded ex-dividend for its next shareholder payment.

South32 share price slides after trading ex-dividend

When an ASX share declares a dividend payment, it must also nominate an ex-dividend date. This forms a wall between shareholders, cutting off new investors from receiving this dividend.

Put simply, anyone who owned South32 shares as of yesterday's close is eligible to receive South32's next dividend payment. Anyone who buys South32 shares from today onwards, taking advantage of this lower share price, is not eligible. 

This is why we typically see a fall in a company's share price when a company trades ex-dividend – it reflects this inherent loss of value.

So in South32's case, this mining giant announced a 4.9 US cents per share interim dividend last month when South32 revealed its latest half-yearly earnings report. As we covered at the time, these earnings saw the company report an 8% drop in revenues, as well as a 34% slump in profits after tax and a 33% fall in earnings per share (EPS).  

As a consequence, South32's interim dividend of 4.9 US cents, fully franked, is a 43.8% drop from the interim dividend of 8.7 US cents that we saw get paid out last year.

Still, investors can look forward to receiving this dividend payment on 6 April next month. But we'll only find out on 16 March what the exact amount that investors will be receiving is in Australian dollar terms. On today's exchange rates, South32's dividend would be worth approximately 7.4 cents per share.

The company now has a dividend yield of 6.49% at the current South32 share price.

Despite the red numbers in South32's latest earnings, the company's shares are still up a healthy 12.7% in 2023 year to date: 

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 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.

More on Dividend Investing

A mature-aged couple high-five each other as they celebrate a financial win and early retirement
Dividend Investing

5 top ASX dividend shares to buy right now

Analysts think income investors should be loading up on these shares.

Read more »

Two adults and a child look happy as they walk through airport with child sitting on suitcase.
Dividend Investing

Will Qantas shares pay a dividend in 2024?

Will the dividends return this year? Let's find out.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Dividend Investing

2 market-leading ASX dividend stocks to buy in April

Analysts have put buy ratings on these market-leaders.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Man holding Australian dollar notes, symbolising dividends.
ETFs

Want the latest dividend from the Vanguard Australia Shares ETF (VAS)? Here's what you have to do

If you want to bag the latest VAS dividend, here's what you need to do.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Dividend Investing

Investing for passive income? Keep any eye out for that boosted Telstra dividend today!

If you own Telstra shares, keep an eye out for that juicy dividend payout today.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Invest $12,000 in Woodside stock and get $5,700 in passive income

Reliable dividend shares are everywhere on the ASX. Here's how you could use that to your advantage.

Read more »

Australian dollar notes in businessman pocket suit, symbolising ex dividend day.
Dividend Investing

3 ASX 300 dividend shares to buy in April

These shares have been named as buys by brokers and tipped to offer very attractive yields.

Read more »