With the tax rate on dividends possibly rising in 2013, many
companies are announcing special dividends to spare shareholders
from an increased tax burden.
Department store operatorDillard's (
) announced a special dividend late Monday of $5 a share.
"This special, one-time dividend of $5 per share reflects our
strong financial position and underscores our confidence in
Dillard's," said Chief Executive William Dillard II in a press
release. The company did not mention the possible tax increases
Companies fromDrew Industries (
) toLas Vegas Sands (
) to TransDigm (
) recently have announced special dividends paid out this year,
before taxes go up.
Dillard's board also declared a regular quarterly dividend of
a nickel a share. Both the regular and the special dividend will
be paid Dec. 21 to shareholders of record Dec. 7.
Without the special dividend, Dillard's doles out 20 cents a
share annually to shareholders.
This gives the stock an annualized yield of only 0.2%, which
is the lowest among the six dividend-paying companies in the
Retail-Department Stores industry group. But with the special
dividend, its yield gets jacked up to about 5.9%.
The company's regular payout has slowly increased in the past
two years after holding steady at 16 cents a share annually for a
number of years. Dillard's most recently raised its quarterly
dividend in May 2011.
Earlier this month, Dillard's smashed expectations with Q3
earnings that surged 100% to 96 cents a share, excluding some
extraordinary tax items. It beat views by a whopping 24
The firm's sales grew 5% to nearly $1.49 billion. Generally
big profit growth should be accompanied by sizable revenue
Analysts see the company's full-year profit jumping 50% to
$6.33 a share. Dillard's rallied to an all-time high Tuesday. The
stock is not a fast mover, but held up well during the recent
The stock cleared a 79.33 buy point in a six-week flat base
Nov. 1 in volume that grew 53% above average. But it's now
extended past that entry.