In the dynamic and often unpredictable world of stock trading, investors are perpetually seeking strategies that can deliver consistent returns amidst market volatility.

While the idea of achieving stability in a fluctuating market may seem daunting to some, an increasing number of astute investors are focusing their efforts on mastering the technique of dividend capture.

This agile strategy allows investors to leverage the rise and fall of dividend payouts, providing them with the opportunity to extract value from the stock market with impeccable timing.

Focus on Turnaround Trades

Dividend capture is a tactic that focuses on profiting from companies' dividend payments, typically in the form of cash disbursements to shareholders. Rather than investing for the long haul, those employing the dividend capture strategy aim to make turnaround trades, to secure the dividend payment while holding the stock for a relatively brief period.

By strategically acquiring shares just prior to the ex-dividend date  — the deadline for being eligible to receive the forthcoming dividend  — investors aim to secure the dividend payout and then promptly exit the position. This strategic move enables investors to earn income from dividends while minimizing their exposure to extended market volatility.

Dividend capture presents a distinct advantage: the capacity to generate income swiftly and recurrently. By judiciously choosing stocks with imminent dividend payouts, investors can position themselves to secure a succession of dividends within a limited timeframe.

This consistent influx of cash can offer a dependable income stream and the potential for reinvestment or additional diversification.

The Fintel platform recently launched a new quant tool, The Dividend Capture Strategy, which highlights stocks with upcoming ex-dividend dates plus other helpful analytics.

Recovery Days Metric is Key

We’ve used that tool to surface 10 stocks that will go ex-dividend in the next few days. The stocks we have selected from the last have low average “recovery days” which is the time it takes for the share price to recoup capital losses after falling by the dividend rate once the record date hits. This means that on average the investor can “harvest” the dividend and then sell the shares in a profitable trade.

Nexstar Media Group (US:NXST), a leading diversified media company, is scheduled to go ex-dividend on Aug. 9, 2023, with the payment following on Aug. 24. It pays a quarterly dividend of $1.35 per share, yielding an annual return of 2.97% and a current yield of 0.74%. With a recovery average of 3.36 days, the stock provides a strong opportunity for dividend harvesting.

RPC, Inc. (US:RES), an oil and gas services company, will also go ex-dividend on Aug. 9 with a dividend payment on Sept. 11. The company offers a quarterly dividend of 4 cents per share, producing an annual yield of 1.92% and a current yield of 0.48%. With a short recovery time of 2.25 days, it is an attractive choice for dividend investors.

Bassett Furniture Industries (US:BSET), a respected furniture manufacturer, is due to go ex-dividend on Aug. 10 and make payment on Aug. 25. With a quarterly dividend of 18 cents per share, it offers a robust annual yield of 4.13% and a current yield of 1.03%. While the stock does have a higher recovery day average of 8.62, a payment yield above 1% and tailwinds of the stock rallying with momentum since the beginning of June, make the trade-off seem a little less risky.

Primis Financial (US:FRST), a community-oriented bank, is set to go ex-dividend on Aug. 10 and pay the dividend on Aug. 25. The stock pays a quarterly dividend of 10 cents per share, resulting in an annual yield of 4.09% and a current yield of 1.02%. Its average recovery day ratio stands at 8.45 days, however the stock has mounted a 38% rally since the beginning of the quarter so momentum is on the traders’ side.

Eaton Vance Senior Income Trust (US:EVF), an investment trust, will go ex-dividend on Aug. 10, with payment following on Aug. 18. This monthly dividend payer offers 6 cents per share, leading to an impressive annual yield of 9.26% and a current yield of 0.99%. With an average of 9.52 recovery days, investors could be wary of the capital recovery period, however history shows that the fund has traded within a $5-$6 range over the last year, giving comfort in its stability.

Bread Financial Holdings (US:BFH) is scheduled to go ex-dividend on Aug. 10, with payment following on Sept. 15. With a quarterly dividend of 21 cents per share, BFH yields an annual return of 2.07% and a current yield of 0.52%. It typically recovers its share price in 2.4 days post-dividend.

Walmart (US:WMT), the multinational retail giant, is set to go ex-dividend on Aug. 10, with payment on Sept. 5. The stock pays a quarterly dividend of 57 cents per share, generating an annual yield of 1.44% and a current yield of 0.36%. While the blue chip retailer has a 14.67 day recovery ratio, the stock has shown consistent share price appreciation over the last five years.

Grocery operator The Kroger Co. (US:KR) is set to go ex-dividend on Aug. 14, with payment due on Sept. 1. The company pays a quarterly dividend of 29 cents per share, providing an annual yield of 2.10% and a current yield of 0.59%. The stock typically recovers its share price in a speedy 2.42 days.

Home Bancshares (US:HOMB), a Arkansas-based regional bank holding company, is scheduled to go ex-dividend on Aug. 15, and payment is due on Sept. 6. It offers a quarterly dividend of 18 cents per share, generating an annual yield of 2.95% and a current yield of 0.74%. With a short recovery time of 2.18 days, HOMB stock presents a promising prospect for dividend capture strategy investors with a solid trade-off.

Bunge (US:BG), a global agribusiness and food company, is set to go ex-dividend on Aug. 17, and will pay a dividend on Sept. 1. With a quarterly dividend of 66 cents per share, investors can anticipate an annual yield of 2.31% and a current yield of 0.58%. The stock has an average of 6 recovery days, however we note that it is trading on a cheap 9x PE and has shown strong momentum since the beginning of June, mounting a 28% rally.