Friday, December 7, 2012

Special Dividends & New Buy

Two of my larger holdings announced special dividends to be paid before year end. I'm VERY excited about getting these payments. I've been a holder of both of these companies for about 3 years (my entire investment career) and am happy as a clam with how I've been treated as a shareholder.



DAKT announced a special $0.50 dividend IN ADDITION to the regular $0.11 semi-annual dividend. Combined, these dividends represent about 6% of the market price. This is the third consecutive year of special dividends from DAKT, so I've gotten quite a bit of my initial investment returned to me. I don't know if now is a great time to buy more, but it's definitely a core holding for me.

SIRI announced a special dividend of $0.05 and a $2 billion share buyback plan. I've owned SIRI since it was trading at $0.65 and sold some shares on the ride up here approaching $3.00. I wish I'd kept all of my shares but it's a great feeling to have nothing but the house's money riding on this position now.

I don't automatically reinvest dividends. I prefer to get the cash and choose investments that have great entry points. Sometimes the stock I choose is the one that paid me the dividend, but the flexibility to choose is of great value to me.

I chose to add some new cash to my account and purchase shares of Friedman Industries (FRD) with a yield of 5.3%. This is a small US manufacturer of steel coils and pipes. With the infrastructure buildout going on in the US, I'm very positive on the industry. Also, the company's founding family has recently given up being the management team - which might open the company up to being purchased by a bigger competitor. The P/E right now is 6.5x and the dividend has been raised at a 8.9% CAGR for the last 5 years.

How many of you have had special dividends announced this year? Which companies are your core holdings? And how do you approach dividend re-investments?

2 comments:

  1. I can see receiving dividends as a great joy in this stock investing game. I created a dividend calendar (I think I will post it to my blog too) all color-coded, so now I can see in which month I get the payment and what day in a month. When the day comes, I am excited like a little kid.

    As far as special dividends, I actually do not remember which stocks of mine paid them. And as far as dividend reinvesting, I let it deposited to my account and use dividends to be allocated where needed, so I do not do DRIP.

    As far as my investments, I would be happy if you visit my blog and check the tab "My holdings" and if you even drop a word on my blog I will like you for some time :)

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    1. Martin,

      Thanks for stopping by. I don't know exactly what day my dividends hit my account or even when stocks go ex-dividend, I just know when the payment policy changes and/or dividends are increased.

      I also do not DRIP - preferring to make a decision about where and when to invest the new money.

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