Why is the Beach Energy share price lagging its sector on Tuesday?

It’s been a day of modest gains for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At the time of writing, the ASX 200 has gained 0.55% to just over 7,000 points. But one ASX sector, in particular, is doing far better than the broader markets today – ASX energy shares.

For one, the S&P/ASX 200 Energy Index (ASX: XEJ) is vastly outperforming the ASX 200 today. It’s currently up a pleasing 1.67%. And we can see this playing out in the share prices of many ASX oil shares.

Take Woodside Energy Group Ltd (ASX: WDS).

Investors are salivating at this oil share’s FY22 earnings that were reported this morning, and have sent Woodside shares up a healthy 1.70% so far today. Likewise, Santos Ltd (ASX: STO) shares have gained a pleasing 1.97%.

But we can’t quite say the same for the Beach Energy Ltd (ASX: BPT) share price. Beach shares closed at $1.74 a share yesterday. But this oil share is only trading at $1.75 so far today, up a seemingly paltry 0.43%.

So why are investors leaving Beach shares out in the cold today?

Why is the Beach Energy share price underperforming?

Well, it isn’t really. See, there is something else going on with the Beach share price today. This energy share has just traded ex-dividend for its upcoming final dividend payment.

When Beach revealed its FY22 earnings results back on 15 August, it also announced that its final dividend for FY22 would come in at 1 cent per share, fully franked. Beach has consistently paid both an interim and final dividend of 1 cent per share since 2017, so this dividend does nothing to break that mould.

But investors needed to own Beach shares yesterday if they wish to receive this dividend, given that today is the company’s ex-dividend date.

An ex-dividend date cuts off any new shareholders from the upcoming dividend. It usually coincides with a share price drop (or, in this case, a depressed share price gain).

This drop reflects the value of the upcoming dividend leaving the company’s share price, seeing as it is now unavailable for newer investors, making the shares nominally less attractive.

This explains why Beach shares are underperforming the company’s peers in the energy sector so dramatically today.

Beach Energy investors can now look forward to receiving the 1 cent per share dividend payment on 30 September.

At the current Beach Energy share price, this ASX 200 oil share has a dividend yield of 1.14%.

The post Why is the Beach Energy share price lagging its sector on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• ASX dividend windfall continues but it’s not just Woodside and ASX 200 energy stocks splashing the big cash
• 3 ASX 200 energy shares smashing multi-year highs on Tuesday
• Woodside dividend tripled: Here’s everything you need to know
• What’s the outlook for the oil price in September?
• What’s boosting the Santos share price on Tuesday?

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. 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 Scott Phillips.

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