In this article, we discuss 11 stocks that paid special dividends in 2024. You can skip our detailed analysis of dividend stocks and their performance over the years, and go directly to read 5 Stocks that Paid Special Dividends in 2024.
Dividends are already a delectable treat for investors, but special dividends are the cherry on the cake. Companies that offer special dividends distribute significantly higher amounts of money annually than expected. That was precisely the move Microsoft Corporation (NASDAQ:MSFT) made in 2004. With a cash reserve of over $50 billion, the company distributed a one-time special dividend that was 38 times larger than its regular dividend of $0.08 per share. These special payments frequently coincide with the holiday season and are likened to year-end bonuses, providing investors with an extra financial boost as the new year approaches. In addition to this, these supplemental dividends can have a significant impact on retirement planning, as reported by Forbes. For example, even if an investment's headline yield seems low, like 1.3%, the total return with special dividends could be much higher, around 6%. Similarly, a 4% headline yield might not seem impressive, but with special dividends factored in, the total return could be as high as 11% annually.
Special dividends have experienced fluctuations in popularity over time, with certain periods witnessing greater prevalence than others. Research published in the Journal of Financial Economics highlighted this trend, indicating that during the 1940s, a substantial 61.7% of dividend-paying firms listed on the New York Stock Exchange (NYSE) issued at least one special dividend. However, this figure dropped significantly to just 4.9% during the first half of the 1990s. Another research paper published in the Journal of Applied Finance emphasized that a company's choice to issue special dividends is connected to its investment opportunities, particularly focusing on growth prospects available within the current economic conditions. The paper examined different aspects of special dividends using research conducted by diverse financial analysts. According to the paper, special dividends serve as a method for managers to allocate excess cash flow to shareholders, addressing the issue of overinvestment. Erik Lie, a Norwegian finance professor, discovered in The Review of Financial Studies that special dividends act as a constraint on managerial excessive spending. Additionally, May Hu, an Associate Professor at RMIT University, suggested in her research paper that companies giving special dividends during economic downturns demonstrate responsible cash management when investment options are limited.
As mentioned earlier, the number of special dividends distributed by US companies has varied over the years. In 2018, there were 48 instances of such dividends paid by S&P 100 companies, followed by a slight decrease to 43 in 2019, according to data by S&P Global Market Intelligence. However, in 2021, there was a notable increase to 54, further escalating to 55 in 2022. Interestingly, in 2023 through June, the count dropped to 36, marking a significant decline compared to the preceding years. That said, on a global scale, investors received a record-breaking $1.66 trillion in dividends in 2023, as reported by Janus Henderson's Global Dividend Index. This marked a significant increase of 5.6% compared to 2022 and an impressive spike of 18.6% from 2019, before the COVID-19 pandemic.
The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some of the most prominent dividend stocks in the US market that have paid regular dividends to shareholders for decades. However, in this article, we will discuss some of the best special dividend stocks.
For this list, we selected US companies that paid special dividends in 2024 so far. Some of these companies do not have regular dividend policies but distributed special dividends to reward their shareholders this year. We measured hedge fund sentiment around each stock according to Insider Monkey's database of 933 funds as of Q4 2023. The stocks are ranked in ascending order of the number of funds that have stakes in them as of Q4. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
ClearOne, Inc. (NASDAQ:CLRO) is a Utah-based communications solutions company that specializes in audio and visual communication products and services. On March 11, the company declared a special one-time dividend of $0.50 per share. The company also paid a special dividend in 2023, which makes CLRO one of the best special dividend stocks on our list.
Other popular dividend stocks that are grabbing investors' attention include The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP).
At the end of Q4 2023, Jim Simon's Renaissance Technologies was the only stakeholder of ClearOne, Inc. (NASDAQ:CLRO), owning stakes worth $641.460.
Smart Share Global Limited (NASDAQ:EM) is a consumer tech company, based in China. The company offers mobile device charging services via both online and offline networks. In the third quarter of 2023, the company reported revenue of RMB 613.5 million, which showed a 24.7% growth from the same period last year. It ended the quarter with approximately $455 million available in cash and cash equivalents.
Smart Share Global Limited (NASDAQ:EM) declared a special dividend of $0.015 per share on March 11. The expected dividend payout is approximately US$8 million, which will be covered by the surplus cash available on the company's balance sheet. EM is among the best special dividend stocks on our list.
As of the close of Q4 2023, 3 hedge funds in Insider Monkey's database reported having stakes in Smart Share Global Limited (NASDAQ:EM), compared with 4 in the previous quarter. The consolidated value of these stakes is over $2.5 million. With roughly 4 million shares, Hillhouse Capital Management was the company's leading stakeholder in Q4.
Runway Growth Finance Corp. (NASDAQ:RWAY) is a specialty finance company that provides growth capital to companies, particularly those in the technology and life sciences sectors. The company started paying dividends in 2021 and has raised its payouts five times since then. During this period, it has also paid special dividends three times. On February 1, the company announced a supplemental dividend of $0.07 per share, which places RWAY on our list of the best special dividend stocks. As of March 14, the stock has a dividend yield of 13.71%.
Insider Monkey's database of Q4 2023 indicated that 8 hedge funds held stakes in Runway Growth Finance Corp. (NASDAQ:RWAY), up from 5 in the previous quarter. Among these hedge funds, Oaktree Capital Management was the company's largest stakeholder in Q4.
LianBio (NASDAQ:LIAN) is a biopharmaceutical company that focuses on identifying and acquiring promising innovative therapies to address unmet medical needs primarily in the Asia-Pacific region. On February 15, the company declared a quarterly dividend of $4.80 per share. The dividend amount paid per share comprises both ordinary shares and American Depositary Shares (ADSs), resulting in a total cash dividend payout of approximately $528 million. LIAN is among the special dividend stocks on our list.
At the end of December 2023, 9 hedge funds in Insider Monkey's database reported having stakes in LianBio (NASDAQ:LIAN), compared with 10 in the previous quarter. The overall value of these stakes is over $333.5 million. With more than 57.5 million shares, Perceptive Advisors was the company's leading stakeholder in Q4.
SIGA Technologies, Inc. (NASDAQ:SIGA) is a biotechnology company that specializes in the development and commercialization of pharmaceutical solutions to combat severe infectious diseases. In the fourth quarter of 2023, the company generated revenue of $116.5 million, which showed a significant growth of 922% from the same period last year. At the end of December 2023, the company had over $150 million available in cash and cash equivalents, up from $98.7 million in 2022.
On March 12, SIGA Technologies, Inc. (NASDAQ:SIGA) declared a special dividend of $0.60 per share. This was the company's third consecutive year of paying supplemental dividends, which makes SIGA one of the best special dividend stocks on our list.
The number of hedge funds tracked by Insider Monkey owning stakes in SIGA Technologies, Inc. (NASDAQ:SIGA) grew to 10 in Q4 2023, from 9 in the previous quarter. These stakes have a total value of more than $27 million. AltraVue Capital owned a stake worth $11.4 million in SIGA, becoming the company's leading stakeholder in Q4.
Graphite Bio, Inc. (NASDAQ:GRPH) ranks sixth on our list of the special dividend stocks. The California-based biotech company is in the clinical stage that focuses on next-generation gene editing. Their mission is to identify and develop treatments for various severe and life-threatening diseases. The company paid a special dividend of $1.03 per share. The specific value of the special dividend will be determined following the deduction of certain cash amounts outlined in the Merger Agreement.
The Procter & Gamble Company (NYSE:PG), Colgate-Palmolive Company (NYSE:CL), and PepsiCo, Inc. (NASDAQ:PEP) are some other popular dividend companies that have distributed dividends to shareholders consistently for years.
According to Insider Monkey's database of Q4 2023, 11 hedge funds held stakes in Graphite Bio, Inc. (NASDAQ:GRPH), compared with 12 in the previous quarter. These stakes have a collective value of over $61.6 million.
