It hasn't been a very pleasant few months for Woolworths Group Ltd (ASX: WOW) shares and the investors who own them on the ASX.
This time last year, Woolworths shares were flying high above $38 each. But today, those same shares are going for just $30.96 at the time of writing, up 0.16% for the day thus far.
Not only is that down 19.9% from where those shares were 12 months ago, but it also puts Woolies down around 17.5% over 2024 to date.
Investors have also had to watch as Woolworths has retreated more than 26% from the company's last all-time high of roughly $42 that we saw back in mid-2021.
Check that all out for yourself below:
However, as all dividend investors know, a falling share price in addition to a stable dividend produces something rather desirable – a rising dividend yield.
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Falling Woolworths shares but a rising dividend yield
A company's dividend yield is a function of two metrics. The first is the raw dividends per share that a company forks out, every six months in this case. The second is the company's share price.
If a company's dividend payments remain the same, but its share price drops, the dividend yield that investors enjoy on any additional share purchases rises.
To illustrate, Woolworths has paid out two dividends over the past 12 months. The first was the September final dividend worth 58 cents per share. The second was the interim dividend of 47 cents per share that investors enjoyed just last month. Both of these dividends came with full franking credits attached. They were also both increases over the previous corresponding dividend payments.
Woolworths' last 52-week high was achieved back in June last year and saw the company hit $40.35 a share. At this share price, Woolies' last two dividend payments would give the company's shares a dividend yield of 2.6%.
Instead, at today's current pricing of $30.96, Woolworths is trading on a dividend yield of 3.39%. Quite an improvement, one could argue.
So the sharp drop that Woolworths investors have endured over the past year or two has a clear silver lining for income investors who have enough capital to buy more shares at these reduced prices.
These share price drops still haven't been enough to close the dividend yield gap that exists between Woolworths shares and those of the company's arch-rival, Coles Group Ltd (ASX: COL). Coles shares are currently trading with a dividend yield of 4.05%. But the gap is closer today than it has been for a long time.
