QBE Insurance Group Ltd (ASX: QBE) shareholders might be feeling frustrated after the share price tumbled 17% over the last month.
At the time of writing, QBE shares are swapping hands for $10.13, down 5.5%.
The insurance giant’s shares have backtracked, likely caused by an underwhelming performance along with rising costs from natural disasters.
QBE recently released its full-year results for the 2021 financial year, reporting growth across key metrics. However, despite the robust performance, the market was unimpressed as QBE fell short of expectations.
In addition, the flooding disaster that has struck Queensland and New South Wales is estimated to cost around $1 billion. This will weigh heavily on the group’s catastrophe allowance amid the further blowout.
Earlier this month, QBE advised it has a maximum event retention of $125 million for non-peak events in the Australia Pacific Division.
QBE’s FY22 catastrophe allowance is $962 million, including a first-quarter allowance of $248 million.
Nonetheless, the board opted to increase a final dividend to be paid to eligible investors.
Let’s take a look at the details below.
What’s the deal with QBE final dividend?
In total, the company will be paying out 19 cents per share for the 6 months ended 31 December 2021. That’s up 4 cents on last year’s final dividend for the 2020 financial year.
Furthermore, the payout ratio for the latest dividend is at 41% of adjusted cash profit. This is in line with the group’s revised dividend policy of 40% to 60% of annual adjusted cash profit.
When can shareholders expect to be paid?
QBE will pay the final dividend to eligible shareholders next month on 12 April.
However, with today being the ex-dividend day, shareholders who held onto QBE shares at Friday’s market close will be eligible for the dividend.
It is worth noting that typically on the ex-dividend day, the share price falls in proportion to the dividend amount.
QBE’s final dividend is partially franked which means that investors will receive some tax credits when tax time comes along.
Currently, QBE has a dividend trailing yield of 1.09% and a market capitalisation of roughly $15 billion.
The post Here’s why the QBE (ASX:QBE) share price is sliding 5% today appeared first on The Motley Fool Australia.
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More reading
- QBE (ASX:QBE) share price backtracks as CEO realigns group’s strategy
- ASX 200 (ASX:XJO) midday update: Block, Zip tumble, QBE’s asset sale
- ‘$2 billion cost’: How are the floods impacting ASX 200 insurance shares this week?
- 4 ASX shares that love rising interest rates: report
- Should you buy QBE (ASX:QBE) shares as an inflation hedge?
Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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