It's been a pleasant, if rather unenthusiastic, start to the trading week for the S&P/ASX 200 Index (ASX: XJO) so far on Monday. At the time of writing, the ASX 200 has gained a less-than-inspiring 0.18% at just over 6,840 points. But the same can't be said of the NIB Holdings Ltd (ASX: NHF) share price.
NIB shares have seemingly tanked today. The ASX 200 insurance company closed at $8 a share last week. But today, NIB opened at $7.99 and is now going for $7.82 a share, down a meaty 2.25% so far.
So what's gotten investors' goats with NIB shares?
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Why is the NIB share price starting the week with a drop?
Well, it's not as bad as it might seem. NIB shares are falling today due to one of the best reasons to have an ASX 200 share fall in value. NIB has just traded ex-dividend for its upcoming final dividend payment.
As we covered last week, NIB will be forking out a final dividend of 11 cents per share, fully franked, on 4 October next month.
But in order to be eligible to receive this dividend, investors needed to own NIB shares as of last Friday's market close. Today is the company's ex-dividend date. As such, any new investors from this session onwards do not qualify for this final dividend.
As such, the value of this payment has left the NIB share price. That's why we are seeing a fall in the value of NIB shares today – there's no free lunch. This is very typical when an ASX share trades ex-dividend, and is probably one of the best reasons for an investor to see their shares fall in value.
NIB's final dividend of 11 cents represents a meaningful decline of 21.4% over FY21's final dividend of 14 cents per share that we saw doled out last year. It brings the company's full-year dividends for FY22 to 22 cents per share. Again, that is a drop of 8.33% over FY21's total of 24 cents per share.
Even after today's falls, the NIB share price is up 11.55% in 2022 year to date. That shows a healthy outperformance of the ASX 200 Index. At the current NIB share price, this ASX 200 insurance share has a dividend yield of 3.2%.
