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Dividend investing

Special Dividend

A one-time, non-recurring dividend paid outside a company's regular schedule.

Part of the Growth & Capital Returns course · Lesson 18 of 26

What it is

A special dividend is a one-off cash payment to shareholders that is separate from, and usually much larger than, the regular dividend. Companies declare them after an unusually strong year, an asset sale, or to return excess cash. By definition it is not expected to repeat.

Why it matters

A special dividend hands you a lump of cash but should not be treated as ongoing income, and dividend-yield figures that include it can look misleadingly high. Because it is non-recurring, it usually says little about the durability of the regular dividend.

How it's calculated

Not a formula. The board declares a fixed amount per share for a specific record date; it is paid once and not built into the regular dividend rate or the forward yield.

How Quintarthai uses it

Distinguish one-time payments from the recurring dividend by reviewing the full dividend history on a company's deep-analysis page (Statistics and Financials 10-yr tabs).

Cross-border note. On the ex-date for a large special dividend, U.S. exchanges may adjust the stock price and, for very large specials, defer the ex-date to the day after payment under specific exchange rules. For Canadian holders of U.S. payers, special dividends are still subject to the standard 15% U.S. withholding in non-RRSP accounts.

FAQ

Should I count a special dividend in a stock's yield?
Generally no, not for forward income. Since it is not expected to recur, including it overstates the yield you can rely on. Look at the regular dividend for ongoing yield and treat the special as a separate, one-time event.
Does the share price drop after a special dividend?
Typically yes. As with any dividend, the stock usually trades lower by roughly the payment amount on the ex-dividend date, because that cash has left the company.
Related terms
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