Why is the Wesfarmers share price sliding lower on Wednesday?

What's going on with Wesfarmers shares today?

| More on:
A sad little girl sits in a supermarket trolley, indicating a decline in share market price.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Wesfarmers shares slip 1.7% to $46.89 during late afternoon trade
  • The company's shares are trading ex-dividend today
  • Eligible shareholders can expect to receive a payment of $1 per share on 6 October

The Wesfarmers Ltd (ASX: WES) share price is backtracking on Wednesday afternoon.

At the time of writing, the conglomerate's shares are down 1.7% to $46.89.

Why are Wesfarmers shares in reverse today? 

On the back of the company's full-year results, investors are selling Wesfarmers shares as they go ex-dividend today.

The ex-dividend date is particularly important as it determines which shareholders will receive the company's latest dividend.

If you held Wesfarmers shares at yesterday's market close, you will be eligible for the final dividend.

However, if you didn't own them and bought them today, the dividend will go to the seller.

What does this mean for Wesfarmers shareholders?

If you've locked in the Wesfarmers dividend, you'll receive a payment of $1.00 per share on 6 October. The dividend is fully franked, which means you'll also get some bonus tax credit to put towards your next tax bill.

Notwithstanding the special dividend paid in December 2021, this is the biggest dividend that will be paid out to shareholders since 2019. In case you were wondering, the final dividend declared that year was $1.20 per share.

Are Wesfarmers shares a buy now?

Following the company's financial scorecard, a couple of brokers weighed in on the Wesfarmers share price.

As reported by ANZ Share Investing, the analyst team at Goldman Sachs raised its price target by 8.4% to $38.90 per Wesfarmers share. Based on the current price, this implies a downside of 17%.

On the other hand, Morgans slashed its price target by 4.8% to $55.60 per share. This represents an upside of 18.5% from where Wesfarmers trades today.

Wesfarmers share price snapshot

Looking at the past 12 months, the Wesfarmers share price has fallen 22% on the back of difficult trading conditions.

In contrast, the S&P/ASX 200 Consumer Staples (ASX: XSJ) sector has dipped by around 2% over the same timeframe.

Wesfarmers shares reached a 52-week low of $40.03 on 17 June as volatility hit global markets. Since then, it has climbed slightly of late, up 17%.

Wesfarmers commands a market capitalisation of approximately $54.08 billion and has a dividend yield of 3.59%.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Man holding Australian dollar notes, symbolising dividends.
Dividend Investing

3 ASX dividend shares to buy with $7,000 and hold for a decade

Let's see why analysts think these shares would be great additions to an income portfolio.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
Dividend Investing

Own IVV ETF or other iShares ASX ETFs? It's dividend payday for you!

Thinking TGIF? There's a better reason to celebrate. It's dividend payday for iShares investors!

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Bank Shares

This is the ASX bank stock with the largest dividend yield right now

Looking to ASX bank stocks for dividend income right now?

Read more »

A group of businesspeople clapping.
Dividend Investing

2 of the best ASX dividend shares to buy now

Bell Potter has good things to say about these income options.

Read more »

woman on phone
Dividend Investing

Is the Telstra share price a buy for passive income?

These are the two main factors I’d look at.

Read more »

Smiling woman with her head and arm on a desk holding $100 notes out, symbolising dividends.
Dividend Investing

2 cheap ASX dividend stocks to buy before it's too late

Analysts think these shares are cheap buys. Let's see what they are saying about them.

Read more »

Young couple at the counter of a hardware store.
Dividend Investing

Here's how often Wesfarmers stock increases its ASX dividend

Wesfarmers has quietly been delivering for income investors...

Read more »

Two smiling women doing a jigsaw puzzle.
Dividend Investing

Buy these ASX dividend shares for passive income

Analysts think these shares could be top picks for income investors.

Read more »