Bank of Queensland Ltd (ASX: BOQ) shares are having a tough finish to the week.
At the time of writing, the regional bank's shares are down over 3% to $6.62.
This compares unfavourably to the ASX 200 index, which is currently up 0.2%.
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Why are Bank of Queensland shares falling?
Today's decline could arguably be described as good news for the bank's shareholders.
That's because the catalyst for this weakness has been Bank of Queensland's shares going ex-dividend this morning for its latest payout. This means pay day is just around the corner.
When a share goes ex-dividend, the rights to the dividend are now settled.
As a result, anyone buying the bank's shares today would not receive this dividend on pay day. Instead, the dividend will go to the seller of its shares even though they're no longer the holder of them.
And as you wouldn't want to pay for something you won't receive, a share price will tend to drop to reflect this on the ex-dividend date.
The Bank of Queensland dividend
Earlier this month, Bank of Queensland released its full year results and reported revenue of $1.6 billion and cash net profit after tax of $343 million. These were down 8% and 24%, respectively, over the prior corresponding period.
Unsurprisingly, this forced the company to cut its dividend in FY 2024. It declared a dividend of 34 cents per share for the 12 months, down 17% year on year. This comprises fully franked interim and final dividends of 17 cents per share each.
It is the latter dividend that Bank of Queensland's shares are going ex-dividend for this morning.
It equates to a 2.5% dividend yield based on yesterday's close price and eligible shareholders can look forward to receiving it next month on 19 November.
Should you invest?
Unfortunately, the market is overwhelmingly bearish on Bank of Queensland at present.
For example, Citi, Macquarie, Morgan Stanley, and UBS all have the equivalent of sell ratings on its shares.
Citi and UBS are among the most bearish brokers out there with price targets of $5.05 and $5.50, respectively. Based on yesterday's close price, this implied potential downside of 20% to 27% over the next 12 months.
Even Morgans, which has a hold rating on its shares, has a price target meaningfully lower than where they trade today. Its valuation of the regional bank currently stands at $6.01 per share.
All in all, this could mean it is worth keeping your powder dry and waiting for a better entry point.
