Companies paying special dividends believe they will do well in the future, and by collecting the special dividend you have the opportunity to reinvest in the business at a lower price or keep the cash to invest when bad times come around.
optionsXpress (Nasdaq: OXPS) recently announced it will be paying a special dividend of $4.50 per share on Dec. 27 to shareholders of record on Dec. 13. At current prices, optionsXpress will have a one-year yield of 26%! That puts its one-year yield higher than the current top high yielders American Capital Agency (Nasdaq: AGNC) (19%) and Chimera Investment (NYSE: CIM) (17.6%). While this is a one-time thing, hence the name "special", high yielders can be interesting situations.
Source: Motley Fool
Related Articles:
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
The Dividend Aristocrats -- stocks that have increased their dividends each year for at least 25 consecutive years -- are an elite group, es...
-
With the U.S. markets near their all-time high, trade and geopolitical uncertainties have added to investors' concerns of a sell-off. Wh...
-
High dividend yields can often mean traders don't think a dividend is sustainable long term. Maybe a business is struggling to grow; may...
-
Given the uncertainties looming in the distance, it doesn’t look like the U.S. Federal Reserve will raise interest rates anytime soon. We co...
-
We feel that these dividend-paying equities - as long as they are from high-quality, low-risk issuers - can give retirement investors a smar...
-
For today’s article, I wanted a simple list of high-yield dividend stocks for 2020. But not just that — the other criteria is that the stock...
-
These dividend stocks on my list have higher-than-normal dividend yields. That makes them bargains. But they also have low price-to-earnings...
-
Each time I write my Income Investors column, I often have to make the tough choice between two deserving candidates. Invariably, the first ...
-
It’s really not easy to find value in today’s stock market. With indices at record highs — and seemingly setting records over and over again...
-
Investors always look for a safe spot in volatile market conditions. It’s natural. And dividend stocks are a natural refuge – they offer a s...
Very novice investor here.
As I post this, the share price is $20.81. So if I buy 100 shares right now at $2081, on December 27th I'm going to get a $450 dividend? Why wouldn't I do that and then sell it all, spend about $26 on trading commissions ($12.99 each for the two trades) total, and pocket $425 easily? This sure seems like a "too good to be true" situation. Why hasn't the stock exploded much higher? I've got to be missing something.
Anon: Theoretically,the stock will go down by the amount of the dividend. It doesn't always happen, but does more so with large special dividends.
Best Wishes,
D4L