Snow in Wisconsin Can Be Significant

Three More Dividend Increases and two special dividends.

One reason I like Wisconsin is the four seasons. I love the flowers in the spring, the warm summer days for enjoying the outdoors and mowing the lawn, the arrival of fall with the marvelous colors, and then winter and the wonder of snow and the fun I have blowing it from the driveway. In fact, the more snow we have, the more I like it. Now, I’m not crazy. I don’t like the bitter cold, so come February I want to go somewhere for a break in a warmer client, if the Lord permits.

A snow blizzard in November isn’t likely. We had a bit of rain and even some hail today, but no blizzard. However, I have seen a different type of blizzard this week. It is a dividend blizzard. It is mounting up and I rather like it. In addition, our holdings increased 2.45% today. Some of this was due to investors rushing to buy the investments we own. For example, ABR increased 9.95% today, and EOG closed up 2.78%. This morning EOG was up 8.56% but it drifted back down as the day progressed. I’m not selling.

Seeking Alpha always informs me of dividend announcements via email.

The Dividend Announcements from ABR, HRZN, and EOG

Here are the email messages I received for the three investments mentioned above. It is interesting that two of the three also have a special dividend. A special dividend is usually not something you can expect each year, but some companies do frequently give special dividends. Arbor Realty Trust Inc, (ABR) declared a small increase compared to the other two. Horizon Technology Finance declared a significant increase and a special dividend. HRZN pays their dividend every month. Finally, EOG (EOG Resources, Inc), not only announced a 10% dividend increase, but they sweetened the blizzard with another $1.50 special dividend.

ABR – Arbor Realty Trust is a mortgage REIT. This is a higher risk type of investment.
EOG Resources gave a nice 10% dividend increase and a special $1.50 dividend. Nice!
HRZN announced an increase to their monthly dividend and a little special dividend too.

What are Special Dividends?

A special dividend is usually a larger dollar amount compared to normal quarterly dividends paid out by the company. Sometimes these are called extra dividends. Special dividends can be cash, but they can also be more shares of the company’s stock. Although some companies only make one special dividend in their history, some seem to like to do it more frequently.

EOG is on a tear for 2021-2022 when it comes to special dividends. However, note there were no special dividends in 2019. In fact, from 1999 through 2019 EOG only paid quarterly dividends. So don’t build your family budget anticipating special dividends. Just enjoy them when you get them.

In 2021-2022 EOG gave significant special dividends. From 1999-2019 it was only quarterly dividends.

One more caution about special dividends is in order. Special dividends have some drawbacks. One is that the price of the shares will usually fall because there is a perception that the company may not be growing. Companies can do several things with profits. They can pay dividends, they can buy back their shares, and they can reinvest in the business. A certain percentage of profits should be reinvested in the business.

Full Disclosure

I own 400 shares of EOG in my ROTH and traditional IRA accounts. Those shares are worth $56,892 as of Friday’s market close. Cindie and I hold a combined 600 shares of HRZN worth only $7,884. It is one of our smaller BDC holdings.

Cindie and I have a total of 3,500 shares of ABR, now with a market value of $50,645. It wasn’t that long ago that the shares were worth about $39,000. Pessimism is something a bear market brings, but it doesn’t mean I have to sell. I’m glad that I think long-term when it comes to our investments.

Investopedia Link: Special Dividend

Just for fun, Lulu Singing Oh Me Oh My