What are special dividends and why do they matter?

Special dividends are one-time cash payments made by companies to shareholders, separate from regular quarterly dividends. They matter because they can be substantially larger than regular dividends—sometimes 5-10 times the size. Companies typically issue special dividends when they have accumulated excess cash beyond what's needed for operations and investments. When announced, special dividends often cause immediate positive stock price movements, creating potential profit opportunities for investors who own the stock before the announcement.

What is a stock buyback and how does it benefit investors?

A stock buyback happens when a company purchases its own shares from the market, reducing the total number of outstanding shares. This benefits investors in several ways: it can increase earnings per share (as profits are divided among fewer shares), often leads to stock price appreciation, and can be more tax efficient than dividends for some investors. Companies with large cash reserves often use buybacks as a flexible way to return capital to shareholders, particularly when they believe their stock is undervalued.

What does "free cash flow" mean?

Free cash flow refers to the cash a company generates after paying for operating expenses and capital expenditures (like buildings or equipment). It's essentially the money a company has left over that it can use to pay dividends, buy back stock, pay down debt, or pursue new opportunities. High free cash flow is generally considered a positive sign of financial health and flexibility. The companies in this group are known for generating substantial free cash flow, which gives them the ability to potentially reward shareholders through special dividends or buybacks.

What is Market Cap and why is it shown for these stocks?

Market capitalization (Market Cap) is the total value of a company's outstanding shares of stock, calculated by multiplying the share price by the number of shares outstanding. It's shown for these stocks because it helps indicate the company's size and resources. Large market cap companies (like many in this selection) typically have the financial stability and cash generation capabilities needed to support major shareholder payouts. These established companies often accumulate substantial cash reserves that could potentially be distributed through special dividends or share buybacks.

What does "Consensus Recommendation" tell me as an investor?

Consensus Recommendation reflects what financial analysts collectively think about a stock—whether they recommend buying, holding, or selling it. This rating combines multiple professional opinions into a single metric. For the cash-rich companies in this group, a strong buy recommendation might suggest analysts believe the company is undervalued and could benefit from deploying its cash reserves. The consensus helps you understand how experts view the stock's current position and future prospects, providing additional insight beyond just the company's cash position.

15 handpicked stocks

Big Payout Candidates

This carefully selected group of companies is flush with cash and primed to reward investors. Each stock has been handpicked by our analysts for its potential to deliver exceptional returns through special dividends or substantial buybacks above their regular shareholder payouts.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 17