The ARB Corp Ltd (ASX: ARB) share price is shedding during morning trade, erasing the 0.97% gain made this week.
This comes despite the 4×4 accessories company not releasing any price-sensitive announcements to the ASX today.
At the time of writing, ARB shares are down 1.89% to $40.57 apiece.
ARB shares set to go ex-dividend
While the company has been quiet on the news front lately, investors are selling off ARB shares.
This is regardless of the company’s shares set to trade ex-dividend tomorrow.
In comparison, the All Ordinaries Index (ASX: XAO) is currently down by 0.89% to 7,763.1 points.
It appears the benchmark index is dragging down the ARB share price. It seems investors are jittery about the Reserve Bank of Australia signalling its intent to raise interest rates as soon as next month.
Nonetheless, investors need to buy ARB shares before market close today to be eligible for the interim dividend.
It’s worth noting though that, historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.
When can ARB shareholders expect payment?
For those who are eligible for the ARB dividend, shareholders will receive a dividend payment of 39 cents per share on 22 April. This represents a growth of 34.5% compared to the previous corresponding dividend of 29 cents per share.
It’s also worth noting that this is the biggest interim dividend the company has ever paid.
The interim dividend is fully franked which means shareholders can expect to receive tax credits from this.
In addition, investors can elect for the dividend reinvestment plan (DRP) which will add a portion of shares to their portfolio instead.
There is a 2% DRP discount rate and the last election date for shareholders to opt in is on 13 April.
The DRP will be calculated using the five-business day daily volume-weighted average price from Thursday 7 April to Wednesday 13 April.
The latest dividend represents a payout ratio of 46% compared with the 43% in the previous corresponding year.
ARB share price summary
Over the last 12 months, the ARB share price has lifted by 14% but is down almost 23% year to date.
The company’s shares reached a 52-week high of $55.00 in January, before treading 26% lower to today’s price.
ARB commands a market capitalisation of roughly $3.3 billion and has a trailing dividend yield of 1.67%.
The post Hoping to pocket the ARB Corporation dividend? Read this appeared first on The Motley Fool Australia.
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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 recommended ARB Corporation Limited. 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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