The market may be dropping today but the BHP Group Ltd (ASX: BHP) share price is standing out with a particularly severe decline.
In early trade on Thursday, the mining giant's shares are down almost 8% to $37.40.
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Why is the BHP share price sinking?
The good news for shareholders is that the BHP share price isn't sinking today because of a bad update or a collapse in the iron ore price.
Rather, today's decline is due to the Big Australian's shares trading ex-dividend for its next dividend payment.
When a company's shares trade ex-dividend, it means that any new shareholders from that day on will not be entitled to the upcoming payment. The rights to that dividend payment will remain with shareholders who held the shares prior to the ex-dividend date. That's even if they sell the shares between now and payment date.
As a result, the BHP share price has declined to reflect this. After all, you wouldn't want to pay for something that you're not going to receive.
But what are BHP shareholders going to receive?
The BHP dividend
Last month when BHP released its full year results, it reported underlying EBITDA from continuing operations up 16% to a record US$40,634 million.
This allowed the BHP board to declare a fully franked final dividend of US$1.75 per share. This equates to a $2.471 per share dividend in Australian dollars. Based on yesterday's BHP share price, this final dividend alone represented a sizeable 6.1% dividend yield.
The good news is that it won't be long until this dividend is paid. Eligible shareholders can look forward to receiving this payment in their bank accounts in four weeks on 29 September.
