Special dividends, often overlooked by mainstream financial websites, can provide lucrative opportunities for income-seeking investors. These payouts are not typically factored into yield calculations, making them a hidden gem for those willing to do extra research. In this article, we will explore five companies offering special dividends with yields of up to 16%.
HSBC Holdings recently announced a 21-cent-per-share special dividend, attributed to the sale of HSBC Bank Canada. While the yield from this special dividend may seem modest, it represents additional cash flow for shareholders. Similarly, Costco has a history of issuing special dividends when its cash reserves reach a certain level, providing investors with an extra 2% in annual yield.
Some companies use special dividends as a way to supplement their regular dividends, particularly when faced with unpredictable profits or cyclical operations. This hybrid approach allows them to deliver consistent, generous dividends while avoiding the need for drastic cuts or suspensions. These companies may offer superior yields that go unnoticed by mainstream data sites but present an attractive opportunity for savvy investors.
Dillard’s, a department store retailer, has been issuing significant special dividends in recent years, amounting to a 4.6% yield on top of its regular dividend. National Presto Industries, a conglomerate with a diverse business portfolio, consistently offers special dividends that boost its annual yield to around 5.6%. Similarly, Haverty Furniture’s special cash dividends, coupled with its growing regular dividend, result in a nearly 8% yield for investors.
CVR Energy, an energy firm with interests in renewable fuels and petroleum refining, has adopted a responsible regular-and-special dividend program following distribution cuts in 2022. Its regular payout currently yields nearly 7%, while its trailing-12-month specials amount to over 15%. Finally, BlackRock TCP Capital Corp., a business development company investing in middle-market companies, has merged with BlackRock Capital Investment Corp., resulting in reduced management fees. The company’s special dividends, amounting to around 35 cents per share, provide an additional source of income for investors.
Overall, special dividends offer a unique opportunity for income-seeking investors to enhance their returns. By researching and identifying companies that issue special dividends in addition to regular payouts, investors can potentially benefit from higher yields and increased cash flow. These hidden gems may not be widely reported by mainstream financial websites, making them a valuable resource for contrarian income seekers.
