The Special Dividend Rush

I spent Thanksgiving weekend with my family at the Venetian Hotel in Las Vegas. Today, the owner of the hotel, Las Vegas Sands ($LVS) announced a special dividend payment of $2.75 per share. Going by yesterday’s closing price that works out to a yield of 6.25%.

The timing of this payment is hardly a coincidence. Tax rates are expected to rise next year for the wealthy. The majority shareholder of LVS is billionaire Sheldon Adelson, a known critic of the Obama administration. The dividend payment will yield Adelson $1.2 billion. On top of that, LVS also increased its regular quarterly dividend by 40%.

Las Vegas Sands isn’t alone:

Companies are paying special dividends at four times the pace of last year as Congress is poised to let the tax on dividends rise next year. Sands rival Wynn Resorts Ltd. (WYNN) declared a $7.50-a-share payout and a doubling of its quarterly dividend to $1 a share last month.

Brown-Forman Corp., the owner of Jack Daniel’s whiskey, said today that it will pay a $4-a-share special payment on Dec. 27 to shareholders as of Dec. 12. The company cited “the uncertainty surrounding future dividend tax rates.”

Since the end of September, 68 companies in the Russell 3000 have announced special dividends. That’s up from 15 over the same period last year.

Posted by on November 27th, 2012 at 1:19 pm

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