Markets in Focus: Dividends

Investing Strategy
June 5, 2024
Every week we provide insights into popular assets and hot questions, so you can easily learn more about the investment market in bite-sized pieces.

In this Markets in Focus we take a closer look at Dividends. But what do you actually know about Dividends?

Take a look below or see a short video here:

What are dividends

A dividend is a distribution of a portion of a company’s earnings to its shareholders. Dividends are often issued as cash payments if you own the underlying share, although they can also be paid out to CFD traders when you don’t actually own the underlying share.

What you should know about dividends

Dividends are a subject that is sometimes overlooked by CFD traders.

However, there are several facts about dividends that any trader should know because they affect the way stocks behave on certain dates.

Yes, CFDs on shares do pay dividends

Just like a stock, if you own (bought) a CFD you will receive a dividend if you own it the day before the ex-dividend date (more on that later). On the dividend payment date, an amount equivalent to the dividend for each share you have exposure to will be paid into your trading account. However, you may also find that the stock price falls by a similar amount to the dividend on the ex-dividend date.

CFDs on indices don’t pay dividends.

What dividends can tell you about a company’s health

Companies pay dividends out of their profits. The dividend is usually a fixed percentage (about a third) of the company’s earnings per share. Analysts forecast dividends, along with earnings and revenues for each company.

Traders often don’t pay much attention to dividends. However, it’s good to know how they are paid out so that you can check when you are receiving them. It’s also good to be aware that a stock might bounce ahead of an ex-div date, and then fall on the day it trades ex-dividend.

Do all US stocks pay dividends

No, not all stocks pay dividends.
For example Amazon never paid dividends in the past while a stock like McDonalds is paying this for more than 30 years with a percentage of 2.58% in 2024.

You can check out the following link:

( to see what the dividend is of your favorite company.

We wish you a successful trading week. With or without a dividend payment.

Until next week!