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It's Raining Special Dividends

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December 04, 2012 – Comments (10)

There has been quite a bit of news covering companies announcing special dividends or pulling dividend payments into '12 from '13 to avoid the possibility of higher div taxes next year.

My weekly bond research turned up two companies, Costco and Murphy Oil borrowing to pay special divs before year end.

Fellow Fool awallejr added a comment to my blog post pointing out that Oracle was pulling payouts from next year forward.

I just ran a Google search (as far as I know Google hasn't joined the special div craze) on 'special dividend' and found the following companies that recently joined the party with a special or advancing a '13 payout to this year.  Didn't double check, but I think these all announced today or yesterday.

   Hospital Corp of America (HCA) - bonuses for announcing its second special, and it'll be borrowing to pay it.

   Eaton Vance (EV)

   Mine Safety Appliances (MSA)

   Paccar (PCAR)

   Sun Hydraulics (SNHY)

   Electro Scientific Industries (EISO)

   Pike Electric (PIKE)

   Cognex (CGNX)

Help fill in the gaps with other year end, corporate dividend foolishness (Foolishness?) or background on these.

Fool on!

Russ

No postion in an company mentioned 

 

10 Comments – Post Your Own

#1) On December 05, 2012 at 11:25 AM, lemoneater (81.74) wrote:

I got a higher than usual dividend from SCCO. Are foreign stocks doing them also?

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#2) On December 05, 2012 at 1:28 PM, ikkyu2 (99.26) wrote:

I wonder what effect paying 'special dividends' that are pulled forward from later years has on a company's "Dividend Champion" status.  You know what I mean, those lists of companies that regularly increase their dividends.

 

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#3) On December 05, 2012 at 7:24 PM, rd80 (98.26) wrote:

@lemoneater - I haven't noticed any foreign stocks with specials or pull-forwards.  There would be less incentive there unless a large number of the shareholders were in the US.  Did a quick check on SCCO and its year end payout was quite a bit more than last year, but no indication of whether tax policy was part of the decision.  Interesting company structure, US company running mines in Latin America and 80% owned by a Mexican company.  I'm sure that makes sense somehow.

@ikkyu2 - Good question.  I don't think a straight special dividend is considered in the lists, but making a move like Oracle's might since the 2013 payout is nearly certain to be less than '12.  

Big payouts could give shareholders a double dose of tax savings.  If a special pushes the stock price down, a shareholder gets the special taxed at 15%, then sells the stock after 1 Jan and uses the capital loss to offset income at the (possibly) higher 2013 rate.

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#4) On December 05, 2012 at 8:01 PM, rd80 (98.26) wrote:

The dividend showers continue:

Dorman Products (DORM)
Dish Network (DISH)
Diamond Hill Investment (DHIL)
MarketAxess (MKTX)
ProAssurance (PRA)
Dick's Sporting Goods (DKS)
Kansas City Life (KCLI)

No postion in any of the above.

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#5) On December 06, 2012 at 9:28 AM, lemoneater (81.74) wrote:

Thanks, for your research rd80, I've noticed that foreign dividend stocks in comparison to domestic dividend stocks have much higher volatility in dividend payments which vary from very generous to very low from quarter to quarter if they even have a quarterly payment vs. an annual or semi-annual payment. I just wondered whether the phenomenon you observed with special dividends applied to SCCO or not, but it does not seem to be the case. 

SCCO was one of my early commodity stocks suggested by Sinchura, back in the day when it was PCU.

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#6) On December 06, 2012 at 7:04 PM, rd80 (98.26) wrote:

More cash on the way.

Marcus Corp. (MCS)
Sirius XM (SIRI)
McGraw-Hill (MHP)
Universal Health Services (UHS)
HEICO (HEI)
Ethan Allen (ETH)
T. Rowe Price (TROW)
Capitol Federal Financial (CFFN)
United-Guardian (UG)

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#7) On December 08, 2012 at 10:44 AM, rd80 (98.26) wrote:

Expedia (EXPE)
Einstein Noah (BAGL)
Hyster-Yale (HY)
Kforce (KFRC)
Syntel (SYNT)
American Financial Group (AFG)
Shoe Carnival (SCVL)
SEACOR (CKH)
Washington Post (WPO) - paying all of 2013's divs in '12
RPM Intl (RPM) - advancing pay date for Jan '13 div into '12
Insteel (IIIN)
Emcore (EME) - special, bump and accelerated payment

Unless otherwise noted, the company is paying a special div before year end.

Maybe it would be easier to list companies that aren't making a dividend change at year-end.

Disclosure:  Long RPM.  No postion in any other company listed in this thread.

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#8) On December 10, 2012 at 8:43 PM, rd80 (98.26) wrote:

Limited Brands (LTD)
CapitalSource (CSE)
Coherent (COHR)
Interactive Brokers (IBKR)
TD Ameritrade (AMTD)
Hastings Entertainment (HAST)
Shiloh Industries (SHLO)
Almost Family (AFAM)
Landstar System (LSTR) - pulling 2013 and 2014 dividends to '12.
Air Methods (AIRM)
Rentech (RTK)
Community Health Systems (CYH)
US Silica Holdings (SLCA)
Perry Ellis (PERY)
John B Sanfilippo & Son (JBSS)
Texas Roadhouse (TXRH)


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#9) On December 10, 2012 at 8:50 PM, JohnCLeven (76.81) wrote:

National Presto Industries (NPK) $1.00 regular div coming early and a $5.50 special dividend on top of that for a total of $6.50 in divs before the new year. = (that amounts to bout an 8.2% yield from this mornings price.

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#10) On December 10, 2012 at 10:38 PM, rd80 (98.26) wrote:

Hi John, 

Thanks for adding to the list.

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