This Longtime Special Dividend Favorite Has Crushed The Market…
Imagine earning a steady income like clockwork. It’s an income investor’s dream…
It’s certainly nice knowing your income won’t deviate too much from one quarter to the next. And if we can pick up some nice raises over time, even better.
What more could an income investor ask for?
Well, I gotta tell ya… There’s something even better than that. How about an occasional windfall?
You see, some companies occasionally pay investors a limited, one-time payment that, in some cases, can amount to 10 to 20 times more than the regular dividend. Yet they go largely unnoticed by the general public. And no, there’s no special trick or complicated system to capturing these dividends — you just have to know where to look…
It’s Special Dividend Season…
In case you missed it, I wrote about special dividends in more detail here. So I’ll just give you the highlights today.
The main thing you need to know is that these distributions aren’t typically reflected in the yields you see quoted on popular financial sites like Yahoo or Morningstar. So most investors have to be “in-the-know” to be able to find companies that are in the habit of paying these outsized one-time payments.
Longtime readers know that I’m a big fan of special dividends. I look for them each month as part of my regular screen for dividend increases over at my premium newsletter, High-Yield Investing.
It’s one of the fun parts of my job. Think of it as an idea generator, giving us a list of companies posting outsized double-digit increases and reliable dividend-payers that have been steadily growing payouts for a decade or more. And then, of course, we find the occasional stock that is set to reward investors with a special one-time bonus.
By definition, these one-time payments are rather unpredictable, so we don’t know from month to month which companies will be featured. But I’ve always got my eyes open for intriguing situations.
So why am I telling you about all of this?
Well, December is usually the busiest time of year for special dividends. Many companies like to reward stockholders with supplemental year-end distributions.
Think of it as a holiday bonus.
I make a regular habit of combing the markets for any and all special dividend announcements. And I’ve compiled a list of my favorite special dividend payers into one report.
Now, I can’t share all of the names in this table out of fairness to my High-Yield Investing subscribers. But I’ve already told you about two of my favorites: Universal Insurance (NYSE: UVE) and Main Street Capital (NYSE: MAIN) here and here.
Another Longtime Favorite…
But since this is the season of giving, I’m going to tell you about another longtime favorite.
RLI Corp (NYSE: RLI) is a specialty insurance company that likes to gift-wrap year-end underwriting profits for investors.
Like clockwork, the insurer makes supplemental payments every December … $2.00 per share in 2015 and 2016, $1.75 in 2017, and $1.00 per share in 2018-2021. And then a whopping $7 this past year.
So while RLI’s quoted yield of around 1.0% is hardly compelling, that figure dramatically understates what stockholders are really receiving. Aside from ordinary dividends (which have risen for 46 straight years), investors have been treated to nearly $33.88 per share in cumulative special payments since 2012.
Not surprisingly, the stock has attracted plenty of buying interest. It has beaten the S&P over the past five years and delivered a market-crushing total return in excess of 2,600% since 2001.
I could cite more examples of special dividend payers that have showered investors with surplus cash and strong performance. But I’ll save a couple more for later. Besides, I’ve already shared a handful by now, so you get the picture.
In the meantime, if you want to know about my absolute favorite high-yield picks, you need to check out my latest report…
In it, you’ll find 5 “Bulletproof Buys” that have weathered every dip and crash over the last 20 years and STILL handed out massive gains. And each one of them carries high yields, with dividends that rise each and every year. Go here to check it out now.