One More Special Dividend Payer To Put On Your Watchlist For 2023
During the holidays last year, I began a series of articles about special dividends.
First, I kicked things off by talking about special dividends — what they are, and how these underappreciated gems are worth considering in your portfolio. Next, I dove a little deeper into the idea by sharing the names of my favorite payers.
If you remember, I also said that the end of the year is prime time for special dividends. It’s usually when these companies announce this little “gift” for investors.
Today, I’d like to tell you about another special dividend payer. It’s one I’ve discussed before, but it didn’t quite make the cut on my list of favorites, partly because it didn’t pay a special dividend last year. That’s okay, though. This one is worth having on your radar, at the very least. Because when it does pay a special dividend here lately, they’re huge.
Let’s learn more about it…
Another Special Big Dividend Payer…
The special dividend payer I want to tell you about is National Beverage (Nasdaq: FIZZ).
Even though the name may sound fairly generic, you gotta love that ticker symbol. As you can probably guess, the company that sells sparkling waters, juices, and energy drinks. This is the corporate parent of the popular La Croix line of flavored waters and other brands such as Shasta and Clear Fruit.
Millions of health-conscious consumers have abandoned sugary soft drinks in favor of alternative refreshments. And National Beverage is right on top of this trend, posting sales of $300 million in the second quarter (ended October 29) — its highest quarter on record. Earnings also surged to $0.39 per share.
In 2021, the company also announced plans to reward shareholders with a generous special dividend of $3.00 per share. The payment was made in February last year to shareholders of record in December 2021. Unfortunately, there was no such announcement in 2022.
So why even bring it up? Well, as they say in baseball, there’s always next year.
You see, this isn’t about a single payment. National Beverage has been consistently sharing profits with stockholders in this manner since 2004. But it doesn’t always happen every year. Back then, the business had a market capitalization of $315 million. Since then, it has made a series of special dividends (eleven in all) totaling $1.2 billion, or $13.28 per share.
That means the company has distributed nearly four times its starting market cap in the form of special dividends. On top of that, the combined value of outstanding FIZZ shares has surged more than 13-fold to reach $4.3 billion.
So early investors have seen 1,000+ percent appreciation and collected their initial stake in dividends several times.
Action To Take
At the time, FIZZ’s latest special dividend equated to a yield of roughly 6%. With a stout balance sheet and strong cash flow generation, I would much rather see National Beverage initiate a more modest regular quarterly dividend. Even if the yield came out to 4%, I would strongly consider adding it to my premium portfolio over at High-Yield Investing.
Still, the special dividends make FIZZ worthy of consideration, particularly on a pullback below $40 (shares are around $45 as of this writing).
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 carry high yields, with dividends that rise each and every year. Go here to check it out now.