The AGL Energy Ltd (ASX: AGL) share price is down 2% on a day where the S&P/ASX 200 Index (ASX: XJO) is up by 0.2%.
There is perhaps one main reason why investors have decided to push down the ASX energy share, and it relates to the dividend.
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AGL shares go ex-dividend
An ex-dividend date is when the investors buying new shares for their portfolio are no longer entitled to the upcoming dividend – there has to be a cut-off somewhere.
For AGL, the business went ex-dividend today. That means the overall value offered by AGL shares is less than it was yesterday because buying shares wouldn't come with the upcoming 23 cents per share dividend.
Coincidentally enough, the decline of the AGL share price today is almost identical to the value of the dividend.
When will the dividend be paid?
AGL is going to pay its FY23 dividend on 22 September 2023, so the dividend will hit shareholders' bank accounts in roughly a month.
How did AGL fund this payment?
The final dividend of 23 cents per share made up the majority of the 31 cents annual dividend per share for the 2023 final dividend.
The ASX energy share's underlying net profit after tax (NPAT) grew by 25% in FY23 to $281 million, with a "strong" second half and there being a significant improvement in AGL's power plant availability as the year progressed.
Management is expecting the positive momentum to continue into FY24. Underlying net profit in FY24 is expected to be between $580 million to $780 million – this would mean underlying net profit could more than double.
How big could the FY24 AGL dividend be?
According to Commsec, the current estimate is that the annual AGL dividend can rise 71% to 53 cents per share. At the current AGL share price, that would represent a dividend yield of 4.8%, excluding any possible franking credits.
