Contrarian income seekers have found a hidden gem in special dividends that most mainstream websites fail to report. These one-time payouts can significantly boost a portfolio’s yield, with some companies offering up to a 16% return. While most websites overlook special dividends in their calculations, savvy investors can take advantage of these overlooked payouts.
Special dividends can stem from various situations, such as selling off a portion of the company or sharing excess cash with shareholders. For example, HSBC Holdings recently announced a special dividend tied to the sale of its Canadian bank, providing an unexpected boost to shareholders. Similarly, Costco has a history of sharing its cash hoard through special dividends, offering investors a higher yield than the market average.
Some companies opt for a hybrid dividend model, maintaining a steady regular dividend while topping it up with special dividends based on profits. These firms often go unnoticed by mainstream data sites, but diligent investors can uncover superior yields hidden in these companies. By delving into the details, investors can uncover special dividends that significantly boost their annual income, such as those from Dillard’s, National Presto Industries, Haverty Furniture, CVR Energy, and BlackRock TCP Capital Corp.
Dillard’s, a department store chain that weathered the pandemic well, offers shareholders substantial special dividends in addition to share buybacks. National Presto Industries, a conglomerate known for its defense division, has a consistent track record of delivering special dividends on top of its regular payout. Haverty Furniture, an upscale retailer affected by market fluctuations, maintains an impressive dividend yield even in challenging times.
CVR Energy, involved in energy and renewable fuels, offers a substantial regular dividend along with periodic special payouts. The company’s future remains uncertain due to potential strategic transactions involving activist investor Carl Icahn. Lastly, BlackRock TCP Capital Corp., a business development company, prioritizes special dividends to reward investors without overcommitting to regular payouts. With the recent merger with BlackRock Capital Investment Corp., TCPC aims to further enhance its growth and scale while maintaining its commitment to special dividends.
For investors seeking to maximize their income, special dividends present a valuable opportunity to boost portfolio returns. By exploring companies that offer these overlooked payouts, income seekers can uncover hidden gems that provide superior yields compared to traditional dividend-paying stocks. With careful research and a keen eye for hidden opportunities, investors can leverage special dividends to enhance their overall investment strategy and achieve greater long-term financial success.
Brett Owens, Chief Investment Strategist for Contrarian Outlook, highlights the benefits of special dividends in providing consistent income and potential growth opportunities. By incorporating these often overlooked payouts into their investment strategy, investors can diversify their income sources and potentially achieve higher returns over time.
