Investors using conventional websites for dividend research may be overlooking significant income opportunities, particularly with “special” dividends that some companies offer. Notably, stocks like Dillard’s (DDS) and The Buckle (BKE) attract attention for their actual yields when factoring in special dividends, with Dillard’s true yield at 5.9% and The Buckle at 9.1%, despite headline yields of merely 0.2% and 2.9%, respectively.
Special dividends are one-time payouts that can significantly enhance a company’s dividend appeal. For instance, Dillard’s special dividends have increased from $15 per share in 2021 and 2022 to a projected $30 in 2025. Similarly, Fidus Investment Corp. (FDUS) has elevated its yield from a headline 9.2% to a true yield of 11.8% through various quarterly specials. In a more extreme example, Bain Capital Specialty Finance (BCSF) boasts a headline yield of 12.8%, translating to a true yield of 14.6% with additional specials over the past year.
Investors are cautioned to conduct thorough research as some companies, like Amerisafe (AMSF) and Old Republic International (ORI), may have fluctuating special dividends due to their cyclical earnings. Overall, understanding the nuances of special dividends can reveal substantial income potentials, encouraging a diversified investment strategy focused on these higher-yielding opportunities.
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