It's been a bit of a rough day for the S&P/ASX 200 Index (ASX: XJO) so far this Friday. After an initially positive start, the ASX 200 has fallen by 0.15% and is now back under 7,050 points. But let's talk about what is happening to the Washington H. Soul Pattinson and Co Ltd (ASX: SOL), or Soul Patts for short, share price.
Soul Patts shares are seemingly having a pretty nasty day. The ASX 200 investing house closed at $33.93 a share yesterday afternoon. But this morning, those same shares opened at $33.77 and are trading at $33.53 at the time of writing. That's a fall of 1.18% from yesterday's close, obviously well over the falls of the broader market.
So what's up with the Soul Patts share price that has seen this company drop so significantly?
Well, it's nothing shareholders should be worried about. In fact, they should be happy about this drop in value. Why? Well, because Soul Patts shares are falling for what is probably the very best reason for an ASX share to drop in value. The company has just traded ex-dividend for its upcoming final dividend of 2023.
Whenever a company declares a dividend payment inbound, it must also nominate an ex-dividend date. This ex-dividend date constitutes a line in the sand for which shareholders get the dividend payment, and which miss out.
Put simply, everyone who owned Soul Patts shares by the close of trading yesterday gets the dividend, as we warned investors at the time. But anyone who buys the shares on or after the ex-dividend date (today) misses out.
Thus, the reason why Soul Patts shares are dropping so markedly today is because the value of this upcoming dividend has now left the Soul Patts share price, making the shares inherently less valuable.
Soul Patts share price falls as latest dividend approaches
So what do eligible shareholders have in store when it comes to the next Soul Patts dividend? Well, the upcoming dividend is the company's final payout for 2023. It will consist of an ordinary dividend payment worth 51 cents per share, fully franked.
It is a pleasing 18.2% rise over the 43 cents per share investors enjoyed this time last year, and continues Soul Patts' 23-year and counting streak of delivering annual dividend pay rises. It's the only company that can claim such a streak.
Combining with the interim dividend from May of 36 cents per share, it brings the company's full-year payments to 87 cents per share. That's a 20.8% rise over 2022's total of 72 cents in ordinary dividends per share.
Eligible Soul Patts shareholders can now look forward to seeing this latest payment arrive in their proverbial mailboxes next month on 12 December.
At the current Soul Patts share price, this ASX 200 dividend star has a yield of 2.58%.
