The Telstra Corporation Ltd (ASX: TLS) share price has been a pretty good investment to have for ASX investors in recent months. The telco remains up 28.07% year to date so far, and more than 32% over the past 12 months. It was only last Monday that the shares hit their 52-week high of $4.02 a share.
But the last week has not been so great for the Telstra share price.
After starting out on Monday morning at $4.02 a share (yes, the 52-week high), Telstra ended up finishing the week at a much lower share price of $3.86. That's a weekly fall of 4.1%. That's almost as much as what the entire annual dividend is worth at that share price (4.14%).
In contrast, we have seen the S&P/ASX 200 Index (ASX: XJO) have a pretty positive week, putting on an additional 0.3%. So the Tesltra share price underperformed the ASX 200 by around 4.3%.
So what's behind this seemingly sudden backwards step for the telco?
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Telstra share price falls as the telco prepares to pay out
Well, we don't have to look too far. Telstra's fall last week was driven by what could possibly be the best reason to have one of your shares go down in value. Remember how we just went through that the last week's drop was almost as large as the company's dividend?
Well, the telco happened to go ex-dividend for its upcoming final dividend payment of 8 cents per share on 25 August (Wednesday). That means that investors who buy TLS shares after this date will not be entitled to receive this dividend. That's why we saw the value of this dividend leave the Telstra share price on Wednesday morning.
This important milestone on Telstra's 2021 calendar was the centrepiece of the company's share price performance last week. Although it resulted in the shares dropping, it's not one too many shareholders will be complaining about.
At the current Telstra share price, the company has a market capitalisation of $45.9 billion, a price-to-earnings (P/E) ratio of 24.7 and a fully franked dividend yield of 4.14%.
