Here’s why the QBE (ASX:QBE) share price is sliding 5% today


QBE Insurance Group Ltd (ASX: QBE) shareholders might be feeling frustrated after the share price tumbled 17% over the last month.

At the time of writing, QBE shares are swapping hands for $10.13, down 5.5%.

The insurance giant’s shares have backtracked, likely caused by an underwhelming performance along with rising costs from natural disasters.

QBE recently released its full-year results for the 2021 financial year, reporting growth across key metrics. However, despite the robust performance, the market was unimpressed as QBE fell short of expectations.

In addition, the flooding disaster that has struck Queensland and New South Wales is estimated to cost around $1 billion. This will weigh heavily on the group’s catastrophe allowance amid the further blowout.

Earlier this month, QBE advised it has a maximum event retention of $125 million for non-peak events in the Australia Pacific Division.

QBE’s FY22 catastrophe allowance is $962 million, including a first-quarter allowance of $248 million.

Nonetheless, the board opted to increase a final dividend to be paid to eligible investors.

Let’s take a look at the details below.

What’s the deal with QBE final dividend?

In total, the company will be paying out 19 cents per share for the 6 months ended 31 December 2021. That’s up 4 cents on last year’s final dividend for the 2020 financial year.

Furthermore, the payout ratio for the latest dividend is at 41% of adjusted cash profit. This is in line with the group’s revised dividend policy of 40% to 60% of annual adjusted cash profit.

QBE will pay the final dividend to eligible shareholders next month on 12 April.

However, with today being the ex-dividend day, shareholders who held onto QBE shares at Friday’s market close will be eligible for the dividend.

It is worth noting that typically on the ex-dividend day, the share price falls in proportion to the dividend amount.

QBE’s final dividend is partially franked which means that investors will receive some tax credits when tax time comes along.

Currently, QBE has a dividend trailing yield of 1.09% and a market capitalisation of roughly $15 billion.

Source: Read More

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