Act Now to Get Special Dividends Deposited in Your Account

Aspecial dividend announcement in my inbox reminded me it’s that time of year: special dividends season.

For certain types of stocks and funds, special dividends point to a high probability of future dividend increases. That’s a big help in a year when falling share prices made us wonder about the stability of our investment choices.

Here are a few special dividends I’m looking at that you still have time to get in on…

Last week, hotel real estate investment trust Apple Hospitality REIT (APLE) announced its regular $0.08 monthly dividend and a special cash distribution of $0.08 per share. The combined $0.16 per share dividend will be paid on January 17, and the ex-dividend will occur on December 29.

The special dividend indicates that APLE will likely return to the $0.10 monthly dividend the REIT paid before the pandemic-triggered economic shutdown.

As a real estate exchange trust (REIT), Apple Hospitality must pay out at least 90% of its net income as dividends. If an REIT has not paid at least 90% as the end of the year approaches, it can pay a special dividend can be paid to meet the legal requirements.

REITs and business development companies (BDCs) operate under the 90% payout rule. If you see one of these companies announce a special dividend payment between now and the end of the year, take a look at the stock. There may be a regular dividend increase coming soon.

Year-end special dividends also show if a company performed better than expectations. If you see a special dividend on a stock that has dropped this year, the stock price is…

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