A special dividend, sometimes known as an extra dividend, is a one-time, non-recurring payment paid to shareholders by a firm. It occurs outside of the normal payout cycle and is typically much larger than a company's standard dividend payment.
When a company raises its regular dividend, investors usually expect this to be the start of a long-term trend. However, in the case of a special dividend, the corporation is indicating that this will be a one-time payment. As a result, unless the amount is big, special dividends have no impact on valuation or yield calculations. However, if the amount is large, special dividends have a significant impact on valuation because they constitute a direct and considerable depletion of the company's assets.
The ex-dividend date for special dividends is determined by the magnitude of the dividend about the security's price, while dividends or distributions of less than 25% are subject to the "normal" ex-dividend date guidelines.
Why do some companies Pay Special Dividends?
A special dividend can be thought of as a one-time "gift" from a corporation as a result of soaring earnings and cash on the balance sheet. When a company has a large amount of cash on its balance sheet and does not choose to reinvest it, the cash may be distributed in the form of a special dividend.
The business is adjusting the percentage of debt vs. equity utilized to finance the company by issuing a special dividend. An organization might employ special dividends to demonstrate its confidence in long-term value production and to boost shareholder trust. When a cyclical company performs better than expected, it may announce a special dividend in addition to its regular payout.
Market value: Rs 1,174.10 Cr.
Dividend yield: 9.26%
Cheviot Company Ltd., founded in 1897, is a Textiles-focused Small Cap company with a market capitalization of Rs 1,205.31 crore. Cheviot Company's current year dividend is Rs 48, with a yield of 9.11 percent. Cheviot Company has a D/E ratio of 0.01, which indicates that it has a low debt-to-capital ratio. The return on equity ratio indicates how much profit is generated for every rupee of common stockholders' equity. The ROE of Cheviot Company is 10.33%. The higher the number, the better.
Cheviot Company's PE ratio is 15.92, which is high and overvalued in comparison. With a respectable interest coverage ratio of 169.52, the company is in good shape.
Market Cap: 16,185.54
Dividend Yield: 0.62
Escorts Ltd., founded in 1944, is a Mid Cap business in the Auto Industry with a market capitalization of Rs 16,112.73 crore. The company reported gross sales of Rs. 57609.5 crores and a total income of Rs.58532 crores in the most recent quarter. For the past three years, the company has shown a good profit increase of 44.65%. The company's debt has been reduced by 270.24 crores. At 0.21 percent, the dividend yield is modest. A special dividend of Rs 2.50 and a regular final dividend of Rs 5 were announced by the corporation. In the most recent quarter, the company generated a net profit after tax of Rs 270.65 crore.
Abbott India Limited was established in 1944. Its share price presently is 17243.85. It currently has a market capitalization of Rs 36565.59 crore. The company reported gross sales of Rs. 43100.2 crores and a total income of Rs. 43934.9 crores in the most recent quarter. The company declared a special dividend of Rs 155.00 and a regular final dividend of Rs 120.00.
For the past three years, the company has shown a good profit growth of 28.93 percent. The company has a solid return on investment (ROI) of 26.55 percent. Abbott India's EPS increased by 31.67 percent, which is a positive sign for the company.
The stock gained 36.02 percent over three years, compared to 49.07 percent for the Nifty Midcap 100. The company reported a Standalone Total Income of Rs 2,809.80 Crore for the quarter ended 31-03-2021, up 15.67 percent from the previous quarter's Total Income. The company declared a special dividend of Rs 5 and a regular final dividend of Rs 5.
BASF India has a PE ratio of 20.30, which is excessive and overvalued in comparison. BASF India has a ROA of 0.45%, which is a poor indicator of future performance. (It's always preferable to have higher values.) BASF India has a D/E ratio of 0.48, indicating that the company has a low debt-to-capital ratio.
In the year 1984, Hero MotoCorp Ltd. was founded. Its share price today is 2914.15. It now has a market capitalization of Rs 58221.77 crore. The company was able to control increased input prices because to strong demand. However, considering the recent substantial rises in metal prices, it will be interesting to see how much of a blow sales margins will suffer in the first quarter of FY 22.
The company declared a special dividend of Rs 10 and a regular final dividend of Rs 25. At 3.62 percent, the dividend yield is modest. Hero MotoCorp's current PE is 19.56, compared to a five-year average PE of 16.13.
Its share price currently is 1045.95. It currently has a market capitalization of Rs 101351.37 crore. Tech Mahindra generates almost 94 percent of its revenue from exports. It earns 48.1 percent of its income in the United States, 26.9% in Europe, and 25.0 percent in the rest of the globe. To implement ‘VaccineLedger' globally, Tech Mahindra has teamed with StaTwig, a Singapore and Hyderabad-based digital supply chain solution provider.
The company declared a special dividend of Rs 15 and a regular final dividend of Rs 15.
High Energy Batteries
Its share price today is 1646.05. It currently has a market capitalization of Rs 295.1 crore. For the past three years, the company has shown a good profit growth of 104.16 percent. The stock gained 399.67 percent over three years, compared to 38.19 percent for the Nifty Smallcap 100. The D/E ratio of High Energy Batteries is 1.37, indicating that the company has a low debt-to-capital ratio.
The company declared a special dividend of Rs 5 and a regular final dividend of Rs 10.
Stock generated 99.15 percent over three years, compared to 38.19 percent for the Nifty Smallcap 100. The company's debt has been reduced by 35.56 crores. With a current ratio of 2.72, the company has a strong liquidity position. The company declared a special dividend of Rs 6 and a regular final dividend of Rs 4.
IFGL Refractories Ltd., founded in 2007, is a Small Cap business in the Industrial Consumables sector with a market cap of Rs 1,472.75 crore.
8 Stocks Paying Special Dividends In July 2021
|Company||Dividend per share||Special Dividend in Rs||EX Date|
|HIGH ENERGY BATTERIES||10.00||5.00||27/07/2021|