Many companies are keeping shareholders away from the fiscal cliff by declaring special dividends, payable before year-end. Costco Wholesale announced a $3 billion dividend today. Billionaire Sheldon Adelson’s Las Vegas Sands has a $2.3 billion payout coming up.
The rush to beat a federal tax-rate increase may make dividend yields less useful as a gauge of whether stocks are cheap, expensive or fairly valued. The Chart of the Day, above, shows an extreme case, the Dillard’s department-store chain.
Dillard’s dividends for the past four quarters are only about 0.2 percent of the company’s share price. The yield will surge to about 6 percent next month because of a $5-a-share special dividend, declared on Monday. Anyone buying the stock after the payout will have to wait 25 years to get that much income from regular dividends, based on the current rate.