In this article I write about three stocks that pay in effect an annual special dividend. A special dividend can substantially increase the dividend yield. But in most cases the special dividend is irregular and may occur once every few years. For example, Costco Corporation (COST) is well-known for paying a special dividend every few years. But Costco often trades at a premium to the broader market, and currently, Costco is trading at a premium to historical valuation multiples. I have also written about MSC Industrial Direct Co. (MSM), which also pays a periodic special dividend.
However, in my research I have come across several stocks that basically pay an annual special dividend with extra cash on hand on top of the quarterly regular dividend. This increases the yield of these stocks dramatically. I have previously written about Lazard Ltd. (LAZ), Ford Motor Company (F), and Cracker Barrel Old Country Store, Inc. (CBRL) as stocks that pay an annual special dividend and yield over 5%. Below I discuss three more stocks in three different industries that have been paying an annual special dividend. In some cases, this payment goes back for many years. These stocks may be suitable for small investors seeking income.