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Why is the Bendigo Bank share price sliding lower today?

Bendigo Bank trades on a trailing dividend yield of 5.8%, fully franked.

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Bernd Struben
Bernd Struben earned his economics degree in the US. Following several years writing about the tourism industry in the Caribbean, he moved to The Netherlands to cover the EU's booming commercial real estate markets. He moved to Australia in 2010, where he transitioned to analysing the Aussie equity markets. He employs a combination of macro economics and company specific data to gauge what he believes are tomorrow's best investments. In his free time, you're likely to find Bernd at the beach or dabbling away on a new work of science fiction.
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Key points
  • The Bendigo Bank share price is in the red on Monday morning
  • The bank's shares trade ex-dividend today
  • Eligible investors can expect the 29 cent per share, fully franked dividend payout on 31 March

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is down 3.1% in early trade on Monday.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed on Friday trading for $9.60. In early morning trade on Monday, shares are trading for $9.30.

So, why is the Bendigo Bank share price sliding lower today?

A man thinks very carefully about his money and investments.

Image source: Getty Images

What are ASX 200 investors considering?

With the S&P/ASX 200 Financials Index (ASX: XFJ) up 0.3%, most of the selling pressure on the Bendigo Bank share price appears to stem from the fact the stock is trading ex-dividend today.

The bank reported its half-year financial results on 20 February (1H FY23).

With statutory net profits increasing 49% from 1H FY22 to reach $249 million, the bank declared a fully franked interim dividend of 29 cents per share. The Bendigo Bank share price closed up 1.8% on the day.

Investors buying the bank stock today will no longer be eligible to receive that payout. Hence the lower opening price today, with the stock down 30 cents per share, almost equivalent to its dividend.

Commenting on the bank's dividend payout, CEO Marnie Baker said:

The board has declared a fully franked dividend of 29.0 cents per share, an increase of 9.4% on the prior half. A DRP (dividend reinvestment plan) has also been announced.

With APRA's approval the Board intends to neutralise the impact of the DRP by arranging for a third party to purchase the shares on market rather than issue additional shares.

Eligible investors can expect to receive that payment on 31 March.

At Friday's closing share price, that represents a yield of 3.0%. Add in the 26.5 cents per share final dividend payout from September, and Bendigo Bank shares pay a fully franked trailing dividend yield of 5.8%.

"These decisions support our strong capital position and our business outlook," Baker said.

That includes the bank's "expectation of residential lending growth at or above system over the long term while balancing our commitment to support our shareholders with a reasonable return on their investment," she added.

Bendigo Bank share price snapshot

As you can see in the chart below, the Bendigo Bank share price is up 2.3% over the past 12 months, despite this morning's retrace. Including the 55.5 cps in dividends, the bank's shares have returned 8.5% over the full year.

Motley Fool contributor Bernd Struben 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 positions in and has recommended Bendigo And Adelaide Bank. 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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