National Australia Bank Ltd (ASX: NAB) shares are having a tough day.
At the time of writing, the banking giant's shares are down 3% to $28.02.
Why are NAB shares under pressure?
The good news for shareholders is that today's decline isn't because of a bad update or a broker downgrade.
In fact, today's weakness could be seen as a positive for them. That's because it signifies that its next dividend will be paid in the near future.
NAB's shares are going ex-dividend today. When this happens, it means the rights to an upcoming dividend are now settled.
As a result, anyone picking up shares today will not be entitled to receive it when it is paid. Instead, the seller of its shares will be the one receiving the payout even though the bank's shares are no longer in their portfolio.
Given that a dividend forms part of a company's valuation, its shares will tend to fall in line with the payout to reflect this. After all, new buyers of its shares don't want to pay for something they won't receive.
NAB dividend
Last week, NAB released its FY 2023 results and revealed a 12.9% increase in net operating income to $20,654 million and an 8.8% increase in cash earnings to $7,731 million.
This ultimately allowed the NAB board to declare a fully franked final dividend of 84 cents per share. This brought NAB's dividend to a fully franked 167 cents per share for FY 2023, which is up 10.6% year on year.
It is the 84 cents per share final dividend that NAB's shares are going ex-dividend for today. This represents a 2.9% dividend yield based on yesterday's close price, which is broadly in line with its decline today.
If you are among its eligible shareholders, you can now look forward to receiving this dividend next month on 15 December.
