If you invest in the stock market for income purposes, dividend stocks would naturally be your first preference. At times, companies try to give pleasant surprises to investors in the form of a special payment, apart from the usual dividends. These sudden pay-outs are known as special dividends. If you are an investor of either of the three companies mentioned below, you are sure to be over the moon, because these companies just declared some extra payments for investors to be paid out somewhere during March or April. Through these special payments, the image of these companies has gone up several notches higher in the minds of customers.
Right track of progress
The electronic retail company, Best Buy (BBY, Financial), may not be in its best phase right now. However, it is taking all the right steps to ensure that it is travelling on the right path. Earlier this year, the retailer cut down close to 50 of its largest stores, so that it could focus more on its smaller stores. Though this could mean a reduction in short term profits, Best Buy is all-poised for some long term growth, which is the key right now. Apart from focusing on prime business operations and pricing its products quite attractively, Best Buy recently announced a special dividend of $0.51 per share to investors, in addition to an increase of 21% in its quarterly dividends, which now stand at $0.23 per share. The special dividends will be paid out in April. During 2015, Best Buy is focusing exclusively on adding value to shareholders, as it intends to buy back shares worth $1 billion in a phased manner within the next 3 years.Ă‚
Extremely special dividend from a big retailer
Investors of Costco Wholesale Corporation (COST, Financial), the retail giant, were in for some great news recently when the company announced a whopping $5 per share as special dividends. This dividend was paid out to investors during Feb. 27. Such a huge amount was possible because Costco took debts at very low rates. Payment of special dividends cost the company a huge $2.2 billion, out of which close to $1 billion was arranged through debts. Being the biggest and most respected name in the retail industry, Costco enjoyed incredibly low interest rates from major financial institutions.Ă‚
Huge returns make this hot dog company a great stock
News about hot dog giant Nathans Famous (NATH, Financial) giving out a huge special dividend to its investors has not come out officially as of now. However as per reliable information, the company is thinking of paying off $116 million out of the $125 million private offering that it received as special dividends to its investors. This would roughly translate to close to $25 per share (based on the number of open shares of NATH floating in the market today). If the deal is officially announced, this huge special dividend would go a long way in boosting the brand’s image, considering the fact that it is currently a non-dividend paying stock.
Conclusion
Special dividends do have a special charm about them as they are declared quite unexpectedly. These dividends not only add great value to shareholders, but also contribute in a large way, in increasing the reputation and brand image of the company. These are special occasions which explain that the company truly cares for its shareholders and work on improving their investors’ returns to a great extent.
