The market may be pushing higher today but the same cannot be said for the Telstra Group Ltd (ASX: TLS) share price.
In afternoon trade, the telco giant's shares are down almost 1% to $3.99.
Why is the Telstra share price underperforming?
The weakness in the Telstra share price today is actually for a good reason.
That's because today is the day that the company's shares go ex-dividend for its upcoming dividend payment.
When a share goes ex-dividend, it means the rights to an impending payment are settled and new buyers will not be receiving the payout. In light of this, a company's share price will usually drop in line with the dividend to reflect this.
This allowed the Telstra board to increase its dividend by 3% to 17 cents per share. This comprises fully franked interim and final dividends of 8.5 cents apiece. The latter will be paid to eligible shareholders late next month on 28 September.
Incidentally, Telstra's payout in FY 2023 equates to a dividend yield of 4.2% for the full year and 2.1% for the dividends individually.
But wait? The Telstra share price is down less than 1% today. Why isn't it falling more? Well, it seems that the market has taken a sudden liking to Telstra's shares on Wednesday.
In fact, if they were not trading ex-dividend today, they would actually be charging 1.5% higher. Bargain hunters may believe that post-results share price weakness has created a buying opportunity.