Friday, August 31, 2012

These Two Companies Are Shoving Mountains Of Cash To Their Shareholders

Income investors love to watch those periodic dividends show up in their brokerage accounts. Good dividend growth stocks send them consistently and give us a raise at least once a year.

Some companies want to give their shareholders something special. When you have a mountain of cash sitting on your balance sheet you can make your shareholders really happy by sharing the wealth in the form of special dividend, and that's what these two companies decided to do this week...

August 27th, AOL Inc. (AOL), a Web services company, announced a special, one-time, cash dividend of $5.15 per share. The dividend is payable on December 14, 2012 to shareholders of record at the close of business on December 5, 2012. That's more than a 15% yield for the special dividend.

Not to be outdone, Fisher Communications, Inc. (FSCI), an integrated media company, announced on the same day a $10.00 per share special one-time dividend. The dividend is payable on October 19, 2012 to shareholders of record on September 28, 2012. That's nearly a 28% yield for the special dividend.

Below are couple of other companies increasing their cash dividends the traditional way during the last week:

Harris Corporation (HRS) operates as a communications and information technology company that serves government and commercial markets worldwide. August 27th the company increased its quarterly dividend 12% to 37 cents per share. The dividend is payable September 19, 2012, to shareholders of record September 7, 2012. The yield based on the new payout is 3.2%.

Triangle Capital Corporation (TCAP) is a business development company specializing in private equity and venture capital investments. August 29th the company increased its quarterly dividend 4% to $0.52 per share. The dividend is payable September 26, 2012 to shareholders of record September 26, 2012. The yield based on the new payout is 8.5%.

Selecting stocks with increasing dividends is critical for an income growth strategy. The above list contains stocks that recently raised their dividends; it is not a list of recommend buys. As always, due diligence should be performed before buying or selling any stock. For a list of stocks with a long string of consecutive cash dividend increases, see this list.

Full Disclosure: No position in the aforementioned securities. See a list of all my dividend growth holdings here.

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(Photo Credit)

Tags: [AOL] [FSCI] [HRS] [TCAP]

6 comments:

  1. so is there a way to take advantage of the AOL & Fisher dividend.

    Say, borrow some funds from a HELOC or 0% credit card offer, load up on shares and then repay loan proceeds with the dividend?

    ReplyDelete
  2. so how high did FSCI jump on the 27th and 28th and how likely is it to drop back even more after its' ex-divvy date?

    ReplyDelete
  3. can someone help me out here? What benefit does the company get from doing such a large Special dividend? Doesn't this just encourage a temporary influx then outflow of cash? Wouldn't initiating a small continuous divvy be a better way to reward long term holders and attract stick around investors? Have any of you seen the effects on PPS this kind of move has on other stocks? I'm confused by the whole strategy.

    ReplyDelete
  4. All: It is usually difficult take advantage of or capture a special dividend. Like all dividends, on the ex-dividend date the opening price is lowered by the dividend. In cases like this the company has excess cash and may not have any other acceptable investments available. Some companies don't want the commitment of paying a regular dividend and prefer the "no strings attached" nature of special dividends.

    Best Wishes,
    D4L

    ReplyDelete
  5. LO: WOW, LOOK AT AOL'S ($5.15/s)(15% yield) & FISHER COMMUNICATIONS ($10/s)(28% yield) SPECIAL DIVIDEND DECLARATIONS!!!! STOCK PRICE NOT MENTIONED.

    ESPECIALLY NOTICE FORWARD EX-DIV & PAYOUT DATES OF BOTH.

    LET'S DO DUE DILIGENCE ON THESE 2 & RUN SOME NUMBERS.

    ReplyDelete

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