Home Alternative Investments Why is the Elders share price in reverse today?

Why is the Elders share price in reverse today?


A farmer looks backwards towards his crops.

Image source: Getty Images

Elders Ltd (ASX: ELD) shareholders might be wondering why the share price is shedding 2.44% to $13.20 today.

The agribusiness company released its half-year results last week, reporting double-digit growth across key financial metrics.

Subsequently, the board opted to significantly increase its interim dividend to eligible investors.

Let’s take a look below at why Elders shares are falling during early morning trade.

Shareholders lock in the Elders interim dividend

The Elders share price is in reverse after trading ex-dividend today.

This means if you purchased shares in the company before today, you’ll receive the dividend. However, if you purchase Elders shares from today, the upcoming dividend will go to the seller.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out.

If you’re wondering why, eligible shareholders tend to quick offload after securing the dividend, looking for other alternative investments.

In addition, the company’s value is worth a tad less after paying out a portion of its profits to shareholders.

When can shareholders expect payment?

For those eligible for Elder’s interim dividend, shareholders will receive a payment of 28 cents per share on 17 June.

The upcoming dividend is 30% franked.

Franking credits, otherwise known as imputation credits, are highly regarded in the investing world. This is a type of tax credit that is passed onto shareholders when dividend payments are made by a company.

Furthermore, investors who elect for the dividend reinvestment plan (DRP) will see a number of shares added to their portfolio. This will be based on a 10-day volume-weighted average price from 31 May to 9 June.

There is no DRP discount rate and the last election date for shareholders to opt in is 2 June.

Elders share price summary

Since the beginning of 2022, Elders shares have edged 7.7% higher following an improvement in seasonal trading conditions.

It’s worth noting that Elders shares touched a multi-year high of $15.32 on Monday 23 May.

In comparison, the S&P/ASX 200 Index (ASX: XJO) surged in the earlier months of 2022, but has reversed its gains.

The ASX 200 benchmark index is down around 3% year to date.

Based on valuation grounds, Elders commands a market capitalisation of roughly $2.06 billion, and has a trailing dividend yield of 3.18%.

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