The Boral Limited (ASX: BLD) share price has been by far one of the worst performers on the S&P/ASX 200 Index (ASX: XJO) in recent times.
The building materials company’s shares hit a 20-month low of $3.43 yesterday despite not releasing any news to the ASX.
The fall represents a decline of 43% since the start of February – a little more than a month ago.
Why are Boral shares in freefall?
The Boral share price has been heavily sold off since the massive capital return to shareholders was announced on 2 February.
Management advised that following a string of asset sales, it would be returning $3 billion of surplus capital to shareholders.
Each eligible shareholder will receive a total cash distribution of $2.72 per share. This consists of a $2.65 per share equal capital reduction, totalling $2,923 million and an unfranked dividend of 7 cents per share, totalling $77 million.
This will be paid next week on Monday 14 March.
In 2021, Boral offloaded its North American Building Products, 50% owned Meridian Brick businesses, and Australian Building Products businesses.
The company has been busy with its divestment strategy, focusing on strengthening core assets and delivering improved returns.
The decision to distribute the proceeds follows the vote in favour at the company’s annual general meeting in late October.
Boral recently engaged with the Australian Taxation Office (ATO) in regards to the tax implications of the capital reduction.
As such, the ATO published a class ruling that stated no part of the return of capital will be assessable as a dividend for Australian taxation purposes.
Boral share price snapshot
After a month of heavy losses, the Boral share price is down 35% over the last 12 months. In comparison, the S&P/ASX 200 Materials (ASX: XMJ) sector is up 13% over the same timeframe.
Based on valuation grounds, Boral presides a market capitalisation of around $3.79 billion, with over 1.1 billion shares on its books.
The post Why is the Boral (ASX:BLD) share price trading at 20-month lows? appeared first on The Motley Fool Australia.
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More reading
- 5 ASX 200 shares slipping to 52-week lows today
- These were the worst performing ASX 200 shares in February
- 5 ASX 200 shares tumbling to 52-week lows today
- Why did the Boral (ASX:BLD) share price just hit a new 52-week low?
- Boral (ASX:BLD) share price edges lower as COVID hits profits
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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