The Motley Fool Discussion Boards

Previous Page

Investment Analysis Clubs / Dividend Growth Investing

URL:  http://boards.fool.com/the-buckle-declared-a-450-special-dividend-30369236.aspx

Subject:  Re: Buckle Date:  11/8/2012  11:52 AM
Author:  kelbon Number:  7619 of 8754

The Buckle declared a $4.50 special dividend today. That's over a 9% yield at today's closing price and much larger than the 2011 special dividend. […]Insiders own a significant number of shares of BKE.


When a company with significant insider ownership starts distributing generous regular dividends topped off with outsized special dividends, watch out. I'm not suggesting that this is always something to run screaming from, but sometimes it is.

Dividends and substantial insider ownership are often considered desirable, but when management starts to pay itself big bonuses in cash (which, essentially, is what dividends are) its often doesn't bode well for the future stock price, or, for that matter the future of the company.

Two examples that come to mind are Bernie Ebbers (WorldCom) and Leonard Riggio (Barnes & Noble).

kelbon
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us