McCarthy & Stone is due to pay a dividend of 3.5p per share/2.6% on Thurs 3 Jan

• The chart shows McCarthy & Stone share price movements since February.
• McCarthy & Stone pays a 3.5p/2.6% dividend. Currently at 135p (at time of writing).
• Shares -16.3% from 2018 highs; +40.3% from 2018 lows; -14.5% year-to date
• All CFD positions held over 4.30pm on Weds, 2 Jan will be paid a dividend at 7:15am on Thurs, 3 Jan.
• Those using McCarthy & Stone CFDs receive the dividend 22 days earlier than those using shares.
• On the day the shares trade ex-dividend the share price tends to drop by the same amount

Click to enlarge

Trading McCarthy & Stone – An Example

Let’s say you like McCarthy & Stone, and would like to get the 3.5p/2.6% dividend. You decide to buy exposure to £10,000 worth of McCarthy & Stone using a CFD, at the current price of 135p. To do this, you need £2,000.

Shares that go ex-dividend typically fall by the amount of the dividend on the ex-dividend date. Many shares then tend to recover over a period of time, helped by dividends being reinvested, creating a dividend recovery trade opportunity.

Assuming McCarthy & Stone shares recover to their pre-dividend share price, your profit from the dividend would be £260, from your initial investment of £2,000.

Be aware that the share price could fall or rise, which could mean that you make an overall loss or increased profit on the position. For example, let’s assume that McCarthy & Stone falls 2% at the same time it pays the dividend. You overall net loss on your £10,000 position would be £200.

This is provided for information purposes only. It should not be taken as a recommendation.