Special dividend

A special dividend is a one-time dividend paid by a company to its shareholders. A special dividend is sometimes called an extra dividend.

Expanded Definition

A special dividend is usually paid when a company has more cash on its balance sheet than it needs to conduct the normal course of business.

A regular dividend is usually paid once each quarter. Changes in the dividend rate are news; a board decision to omit a dividend (signified in Barron's with a large black O) attracts attention and can impact share value. Companies that pay steady dividends are highly regarded by some investors.

The terms special dividend or extra dividend signify that the payment is a one time event not expected to be a recurring payment.

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