Dividend payments are one way companies reward shareholders. Ordinary dividends are often paid monthly, quarterly, twice a year, or annually, while special dividends are one-time payouts following events like windfall profits or asset sales that temporarily increase a company’s cash reserves.
Special dividends can boost shareholder value, attract investors, and signal confidence in a company’s future.
For example, Zeder Investment Ltd recently announced a special dividend equal to about 10% of its current share price. This payout follows the sale of its farming units through subsidiaries. Zeder’s special dividend is expected on November 25, 2024, with the last day to buy shares qualifying for the payout on November 19, 2024.
In October, Zeder's financial results highlighted that the board remains engaged with third parties regarding Zaad and is evaluating strategies to maximize shareholder wealth, including potential asset sales.
PBT Group, on the other hand, has a dividend policy that allows its board to declare interim and final dividends, along with special or ad-hoc dividends. With an annual dividend yield of 5% and an additional special dividend, the total annual payout is approximately 10%.PBT’s special dividend payout is often similar to its ordinary dividends.
Special dividends do not factor into the dividend yield calculation, which indicates the percentage of a company’s share price paid annually in dividends based on the current share price.
Notably, both Zeder and PBT are among the first companies to move to the JSE Main Board's General Segment, benefiting from adjusted listing requirements for smaller groups.
How to Earn the Dividends?
To receive dividends, shares must be purchased on or before the last trade date announced when the dividend is declared. No action is required from shareholders to receive payouts on the payment date. Dividend withholding tax applies to all dividend payouts unless otherwise specified, such as with a capital reduction (when a company returns surplus capital to shareholders).
This year, Zeder has declared three special dividends, including this upcoming one, while PBT pays dividends twice a year, with another payout expected in December
Conclusion
Due to dividend declarations, a company’s share price may adjust downward relative to the upcoming payout. Future performance depends on various factors, including market sentiment and company performance.
Investors can reinvest net dividends automatically or have them paid into their account (default) to withdraw or diversify. On EasyEquities, PBT shares are brokerage-free, allowing investors to pay lower transaction fees - more shares, more dividends.
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