This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cash In on the Special Dividend Craze

NEW YORK ( TheStreet) -- Adam Smith was wrong.

In his classic The Wealth of Nations, available free from Penn State , Smith predicted that capitalism's winners would reach a point of satiation, that rather than continue to hoard their wealth they would spread it around, bending capitalism toward the general welfare.

Smith never met Bill Frist of the Hospital Corporation of America (HCA)-controlling Frist family. Or Las Vegas Sands (LVS - Get Report) CEO Sheldon Adelson. Or Oracle (ORCL - Get Report) CEO Larry Ellison. Or dozens of other extremely-rich people who, appalled that taxes on dividends, currently at the 15% capital gains rate, would rise in January to the rates on ordinary income, as high as 39.6%, with a special 3.8% tax on investment income on top to pay for health reform, are cashing out early, as our Jonathan Heller reported Tuesday.

The folks at iStockAnalyst say total special dividends are up 400% this year , thanks to scheduled changes in the tax law.

If Frist and Adelson and Ellison had been really clever they might have had the good sense of George Steinbrenner, who died in 2010, when the estate tax was at zero, before it was reimposed, as The Los Angeles Times reported at the time.

You can still get in on this action. While many special dividends have already been paid, or their record dates passed, I've compiled a small collection of deals from press releases, ordered by record date:
  • Las Vegas Sands (LVS - Get Report), $2.75/share to shareholders of record December 6.
  • Sturm Ruger (RGR), $4.50/share to shareholders of record December 7.
  • Heartland Express (HTLD), $1/share to shareholders of record December 7.
  • Costco (COST), $7/share to shareholders of record December 10.
  • Lancaster Colony (LANC), $5/share to shareholders of record December 10.
  • Brown Forman (BF.B), $4/share to shareholders of record December 12.
  • Electro-Scientific Industries (ESIO), $2/share to shareholders of record December 13.
  • Cato (CATO), $1/share to shareholders of record December 14.
  • Dish Network (DISH - Get Report), $1/share to shareholders of record December 14.
  • Pet-Med Express (PETS - Get Report), $1/share to shareholders of record December 14.

This is just what I found poking through news releases on Google for a few hours. Maybe you can find others. Please leave them in the comments, and thank you.

This doesn't count companies like Oracle and Wal-Mart (WMT - Get Report) who are paying next year's dividends this month in order to avoid the tax bite. These are just companies pushing out special dividends, dividends on top of their regular pay-outs, in order to keep money in insiders' pockets and away from Uncle Barack.

And some of these deals are truly extraordinary -- Costco and Hospital Corporation of America (HCA) are both borrowing money to make these payouts, HCA for the second time this year. (They expect to put another $2/share in stockholders' pockets, mainly private equity folks and the founding Frist family, before December 31, but haven't announced a record date yet.)

I find this funny. The "fiscal cliff" talks are still going on, and I really don't expect that, in the end, taxes on dividends are suddenly going to triple. If you're like me and keep your stocks in an IRA, or you're not a multimillionaire, this is just a windfall, a little stimulus for your yuletide stocking.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DISH $64.61 0.00%
LVS $56.04 0.00%
ORCL $39.94 0.00%
PETS $16.85 0.00%
WMT $71.98 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs