Image Source: Getty Images
The market may be falling today, but the BHP Group (ASX: BHP) share price stands out with a particularly severe drop.
In early trading on Thursday, shares of the mining giant fell nearly 8% to $37.40.
Why is BHP’s share price sinking?
The good news for shareholders is that BHP’s share price is not sinking today because of a bad update or a collapse in the price of iron ore.
Rather, today’s drop is due to Big Australian stock trading ex-dividend for its next dividend payment.
When a company’s shares are traded ex-dividend, it means that any new shareholder from that day on will not be entitled to the next payment. The rights to that dividend payment will continue to belong to the shareholders who owned the shares before the ex-dividend date. That is even if they sell the shares between now and the payment date.
As a result, BHP’s share price has decreased to reflect this. After all, you don’t want to pay for something you’re not going to get.
But what will BHP shareholders get?
The BHP Dividend
Last month, when BHP released full-year results, it reported underlying EBITDA from continuing operations rose 16% to a record $40.634 million.
This allowed the BHP board to declare a final fully paid dividend of US$1.75 per share. This equates to a dividend of $2,471 per share in Australian dollars. Based on yesterday’s BHP share price, this final dividend alone represented a hefty 6.1% dividend yield.
The good news is that it won’t be long before this dividend is paid. Eligible shareholders can expect to receive this payment in their bank accounts in four weeks on September 29.