United Utilities is due to pay a dividend of 27.5p per share/3.4% on Thurs, 20 Jun

• United Utilities pays a 27.5p/3.4% dividend. Currently at 814p (at time of writing).
• Shares -7.3% from 2019 highs; +13.1% from 2019 lows; +10.7% year-to date.
• All CFD positions held over 4.30pm on Weds, 19 Jun will be paid a dividend at 7:15am on Thurs, 20 Jun.
• Those using United Utilities CFDs receive the dividend 31 days earlier than those using shares.
• On the day the shares trade ex-dividend the share price tends to drop by the same amount.

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Trading United Utilities– An Example

Let’s say you like United Utilities and would like to get the 27.5p/3.4% dividend. You decide to buy exposure to £10,000 worth of United Utilities using a CFD, at the current price of 814p. 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 United Utilities shares recover to their pre-dividend share price, your profit from the dividend would be £340, 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 United Utilities falls 2% at the same time it pays the dividend. Your 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.