Dividends are often paid out on a per-share basis as a way to reward investors. Many companies issue a regular dividend–usually quarterly. This helps supplement the money investors are spending on shares while they wait to realize gains. Regular dividends are typically in the range of 1% to 5%. Special dividend stocks are different, though.
Some companies dealing in commodities and other established sectors pay out dividends regularly. Conversely, special dividends are non-regular dividends paid as a result of a special event or a year of unusually high earnings. These payments are usually much larger than quarterly dividends.
Special Dividend Stocks to Watch
In most cases, special dividends are a one-time payment, which means they might not be a reason for new investors to buy. However, some companies have paid out special dividends year after year, and this list will take a look at some of those companies.
- Costco Wholesale Corporation (Nasdaq: COST)
- American Financial Group, Inc. (NYSE: AFG)
- Wingstop, Inc. (Nasdaq: WING)
- Old Republic International Corporation (NYSE: ORI)
- Camping World Holdings, Inc. (NYSE: CWH)
No. 5 Costco Wholesale Corporation
Many people love Costco for its free samples or cheap hot dogs, but there’s something else for investors to love about Costco. The wholesaler also delivers for its investors and has done so many times in the form of special dividends. In November 2020, the company announced a special cash dividend of $10 per share.
Although Costco has not issued a special dividend since the one in 2020, its cash balances are approaching pre-pandemic levels. It is expected that it may issue a special dividend soon.
No. 4 American Financial Group, Inc.
American Financial Group is a financial services holding company based in Cincinnati, Ohio. It primarily deals in insurance and investments through businesses such as Great American Insurance Group. It offers insurance products to individuals in the form of annuities, plus a variety of insurance products for businesses.
In late May 2022, AFG announced a special dividend of $8.00 to be paid out to investors. This is in addition to a $2.00 special dividend that was paid out with the regular Q1 dividend. It paid out dividends eight times in 2021 and fives times in 2020. In fact, it has paid out dividends more than four times per year every year since 2017. Its typical payment are more like $0.50, and its share price is around $140. So far, the two special dividends from this fiscal year make up around 7% of its current share price.
No. 3 Wingstop, Inc.
Wingstop is a large fast-food chain known for its wings. It has been around for more than 20 years and today, there are over 1,500 Wingstop locations globally. The company is able to keep costs low with relatively slim operations and a low-cost product, allowing it to expand rapidly. As a result, it has been paying it forward in the form of dividends to investors.
WING pays regular dividends to investors with a yield of 0.88%. However, the company has also paid special dividends that have bolstered its total dividend payments. In March 2022, it paid a $4.00 special dividend, and in late 2020 it paid a $5.14 special dividend. While it has had some shaky quarters, it has a new CEO and is still paying special dividends to its investors.
Special Dividend Stocks No. 2 Old Republic International Corporation
Old Republic International is a property insurance, title and deed company based in Chicago, Illinois. According to its website, it is one of the 50 largest shareholder-owned insurance businesses and is also a Fortune 500 company. Overall, it is one of the largest insurance companies in the country.
Old Republic (ORI) has been consistent with its dividends, too, paying four times per year. Its current dividend yield is 3.89%. It typically pays a dividend between $0.195 and $0.23 per share, but it has also issued several special dividends. In December 2021, it paid a special dividend of $1.50 per share, and in January 2021 it paid $1 per share. It paid no special dividends in 2020, but it paid them in 2019 and 2018. These dividends are generous for a stock with a share price of around $25.
Special Dividend Stocks No. 1 Camping World Holdings, Inc.
Camping World Holdings is the largest retailer of RVs; it also sells camping equipment, boating equipment, fishing gear and other related products. Between Camping World and Good Sam, which rents out RVs, there are locations all over the United States. The company is based in Lincolnshire, Illinois.
The company’s stock, CWH, also pays a generous dividend. In fact, its dividend yield is 6.84%
That is in part due to its relatively low share price; it currently trades for less than $30. However, CWH shares typically pay a quarterly dividend of around $0.50, and it has been paying more generous dividends lately. For instance, its last dividend payment, in March 2022, was $0.63 per share, and the next dividend payment is projected to be the same.