Why British American Tobacco plc, HSBC Holdings plc And BHP Billiton plc Should Lag The FTSE 100 Today

British American Tobacco plc (LON: BATS), HSBC Holdings plc (LON: HSBA) and BHP Billiton plc (LON: BLT) are all slipping.

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The FTSE 100 (FTSEINDICES: ^FTSE) continues its slide, losing another 45 points so far this morning to 6,409. It has yet to dip below the 6,400 level, which some people seem to think is relevant — though absolute index values, of course, have no real meaning. It seems the markets are nervous ahead of today’s update from the US Federal Reserve, amid growing fears of a cut in economic stimulus measures — it’s sure to happen sometime fairly soon, and punters need to just get over it.

The gloom is also affecting individual shares. Here are three that are falling today:

British American Tobacco

Shares in British American Tobacco (LSE: BATS) fell 63.5p (2%) to 3,343p this morning, on the day the shares went ex-dividend. And it’s a frequent phenomenon to see a share price fall by more than the dividend price on the day — in this case we had an interim dividend of 45p per share, and the shares fell by an additional 18.5p. Of course, weakening sentiment towards the tobacco business may be playing a part, but investors considering selling will often wait for ex-dividend day.

Analysts are still expecting British American to grow its earnings per share (EPS), with a 6% rise forecast for the full year, and a dividend yield of around 4.3% seems likely.

HSBC Holdings

We saw something similar this morning at HSBC Holdings (LSE: HSBA) (NYSE: HBC.US), with the bank’s shares losing 17.6p (2.5%) to 687p on ex-dividend day too. This time it was a second-quarter payment of 10 cents (approximately 6.6p) per share, which is way short of the price drop — and the rest of the banking sector appears more stable today.

Despite the fall, the prospects for HSBC are looking good, with a 30% rise in EPS currently forecast and a likely dividend yield of 4.7% on the cards for the full year.

BHP Billiton

The mining sector is turning tail again this week, and BHP Billiton (LSE: BLT) is one of today’s biggest fallers with a dip of 42p (2.2%) to 1,881p. In annual results yesterday, the miner reported a 22% fall in underlying operating profit to $21bn due to falling commodity prices — the firm actually raised its production to record levels.

On the day of the results, the price fell 32p (1.6%) to 1,924p, and the sell-off is clearly continuing across the sector today. The City is, however, optimistic for the year to June 2014, as metal prices have been starting to recover recently — there’s a 20% rise in EPS for BHP currently being forecast.

Finally, you can compensate for the day-to-day ups and downs of share prices by looking for reliable dividends. So how would you like a company that’s offering a 5% yield and which could be set for some nice share-price appreciation, too?

All you need to do is get a copy of our BRAND-NEW report, “The Motley Fool’s Top Income Share For 2013” — it’s completely free of charge, but it will only be available for a limited period. Click here to enjoy your copy today.

> Alan does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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