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Before Year End:

A Wave of ‘One-Time’ Special Dividends?

 

 

We highlighted in our recent 5×5 the prospects around excess liquidity and captured capital on corporate balance sheets –

‘Finally, we would expect some of the elevated cash on corporate balance sheets to be used for share repurchases and dividends. We may even see a return of one-time special dividends as we progress into year-end (note – we may see some fairly significant tax changes in the new year).’

During earnings season we witnessed many companies reignite their share repurchase programs. Yesterday, Costco (COST) announced a special cash dividend of $10 per share totaling $4.4 billion. The special dividend will be funded through existing cash.

The excess liquidity and captured capital theme may be a source of even greater shareholder friendly activity than we originally expected, especially as the prospects for global growth improve.

 

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