The BHP Group Ltd (ASX: BHP) share price is currently the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday.
At the time of writing, shares in the iron ore major are down 6.73% to a 9-month low of $42.00.
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Why is the BHP share price free-falling?
The good news is that the decline in the BHP share price today is largely driven by its shares trading ex-dividend.
When a share trades ex-dividend, it means that new holders will not be eligible to receive an upcoming dividend payment.
A company's share price typically falls on the ex-dividend date to the amount of the upcoming dividend.
About the BHP dividend
Investors who held BHP shares before the ex-dividend date will be eligible to receive the company's final dividend.
BHP will be paying its shareholders a fully franked US$2.00 per share. This equates to $2.72 at current exchange rates.
The dividend will be paid out to eligible investors on Tuesday, 21 September.
At the time of writing, the BHP share price has declined $3.06. This means that about 88% of its decline is attributable to the dividend.
What else is weighing on BHP?
Broader market weakness and declines across the mining sector could also be driving down the BHP share price.
The ASX 200 is down 0.91% to 7,458.3 with most sectors in the red.
In addition, the S&P/ASX 200 Materials (INDEXASX: XMJ) index is the worst-performing sector on Thursday, tumbling 2.70%.
BHP share price enters negative year-to-date territory
BHP shares hit an all-time high of $54.55 on 30 July, representing a year-to-date return just shy of 30%.
They are now down 2.35% this year following rapidly deteriorating iron ore prices and today's ex-dividend.
There are increasing concerns that iron ore prices might remain subdued in the short-to-medium term as China demand eases and global supply accelerates.
