Special Dividend Payments Increase Fourfold in 2012 as Companies Look to Avoid Upcoming Dividend Tax Increase
December 04 2012 - 8:20AM
Marketwired
A dividend tax increase has been a major concern for investors as
the upcoming fiscal cliff approaches. Major companies such as Las
Vegas Sands and Wal-Mart have declared special dividends or have
moved up quarterly dividend payments in attempts to avoid the
looming tax increase. According to Bloomberg, from the end of
September to mid-November, 59 companies in the Russell 3000 stock
index have paid special dividends, compared to just 15 one
year-ago. Five Star Equities examines the outlook for dividend
yielding companies and provides equity research on Health Care
REIT, Inc. (NYSE: HCN) and R.R. Donnelley & Sons Company
(NASDAQ: RRD).
Access to the full company reports can be found at:
www.FiveStarEquities.com/HCN www.FiveStarEquities.com/RRD
U.S. investors are set to face a dividend tax increase in the
New Year. The current top tax rate on dividends of 15%, which was
set in the Bush-era, will expire in January. If lawmakers fail to
take action dividends will be taxed at the same level as wages and
salaries in 2013. President Obama's plan would see the top tax rate
on dividends rise to 39.6 percent for high-income earners, which
doesn't include the new 3.8 percent tax on investment income added
by Obama's health-care law.
"The prevailing fear is that if taxes for dividends increase,
dividend yielding companies could grow less attractive and could
see a multiple de-rating," said Savita Subramanian, a strategist at
Bank of America Merrill Lynch.
Five Star Equities releases regular market updates on dividend
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Health Care REIT is a real estate investment trust that invests
across the full spectrum of seniors housing and health care real
estate. As of September 30, 2012, the company's broadly diversified
portfolio consisted of 1,030 properties in 46 states, the United
Kingdom, and Canada. The company currently offers investors an
annual dividend of $2.96 per share for a yield of approximately 5.0
percent.
R.R. Donnelley is a global provider of integrated
communications. The company works collaboratively with more than
60,000 customers worldwide to develop custom communications
solutions. The company currently offers investors an annual
dividend of $1.04 per share for a yield of approximately 11.05
percent.
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