Why is the Brickworks (ASX:BKW) share price falling today?

a bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.

The S&P/ASX 200 Index (ASX: XJO) is having a bit of a strange start to today’s trading session this Tuesday. At the time of writing, the ASX 200 is currently down 0.36% at 7,344 points after erasing an initial bump into positive territory earlier this morning. But one ASX 200 share is moving far more decisively today. That would be the Brickworks Ltd (ASX: BKW) share price.

Brickworks shares are currently trading at $23.05 each, down a nasty 4.12% from yesterday’s closing price. So why is Brickworks getting so severely sold off this morning, especially compared to what the ASX 200 is doing today?

The pitfalls of trading ex-dividend…

Well, it’s not as bad as you might fear. We can put this seemingly disappointing performance for Brickworks today down to the company trading ex-dividend for its upcoming final shareholder payment for the year this morning. When a company announces a dividend, it also includes the ex-dividend date which determines which shareholders receive the dividend in question.

Shareholders who held Brickworks shares yesterday or prior will receive this 40 cents per share payout while new shareholders from today will not. This means the value of this dividend effectively left the Brickworks share price today. It’s one of the best reasons to have one of your shares fall in value.

So how much is this dividend worth?

Back on 23 September, Brickworks delivered its full-year earnings results for the 2021 financial year. Back then, the company announced that its final dividend for FY21 would come in at 40 cents per share, fully franked. That pips last year’s final dividend of 39 cents per share by 1 cent (or 2.6%) and brings its total dividends paid in 2021 to 61 cents per share, a 3.4% increase over 2020’s total dividends.

Brickworks is an ASX 200 company with one of the strongest dividend streaks on the market. It hasn’t cut its annual dividend for more than 40 years and has increased it every year since 2009.

Shareholders who held Brickworks shares before today will receive this 40 cents per share dividend later this month on 24 November.

Brickworks share price snapshot

As it stands at today’s share price, Brickworks has a dividend yield of 2.59%, fully franked. At this pricing, Brickworks is up more than 20% year to date in 2021 so far, as well as being up 33.3% over the past 12 months, and 81.6% over the past 5 years.

Saying that, the company has pulled back from the recent all-time highs we were seeing back in September. Late in that month, Brickworks hit a new all-time high of $26.32 a share. The company is now around 10% off of that high after today’s sizeable drop.

At the current Brickworks share price, this ASX 200 share has a market capitalisation of $3.57 billion and a price-to-earnings (P/E) ratio of 14.8. 

The post Why is the Brickworks (ASX:BKW) share price falling today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Brickworks. The Motley Fool Australia owns shares of and has recommended Brickworks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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