Tuesday, November 27, 2012

Special Dividends

According to Wikipedia:
A special dividend is a payment made by a company to its shareholders that the company declares to be separate from the typical recurring dividend cycle, if any, for the company. Usually when a company raises its normal dividend, the investor expectation is that this marks a sustained increase. In the case of a special dividend, however, the company is signalling that this is a one-off payment. Therefore, special dividends do not markedly affect valuation or yield calculations. Typically, special dividends are distributed if a company has exceptionally strong earnings that it wishes to distribute to shareholders or if it is making changes to its financial structure, such as debt ratio.
Vincent Mao, Investor's Business Daily, in 'Department Store Dillard's Unveils Special Dividend'
With the tax rate on dividends possibly rising in 2013, many companies are announcing special dividends to spare shareholders from an increased tax burden.
Department store operator Dillard's (DDS) announced a special dividend late Monday of $5 a share. 
Companies from Drew Industries (DW) to Las Vegas Sands (LVS) to TransDigm (TDG) recently have announced special dividends paid out this year, before taxes go up.
Read More At IBD: http://news.investors.com/investing-the-income-investor/112712-634797-dillards-announces-special-payout-to-shareholders.htm#ixzz2DUCgrtyF

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