The Fiscal Cliff That Saved Christmas

There are certainly plenty of reasons to fear the fiscal cliff.

Expansion-crushing tax increases and back-breaking spending cuts will kick in both political parties can't find common ground somewhere in the middle.

However, fiscal cliff fears -- and the meaty dividend declarations that they have inspired -- may be just the ticket to arm investors with the necessary pocket change to spend more than they were planning this holiday season.

Las Vegas Sands (NYSE: LVS  ) is only the latest company to declare a beefy distribution that will take advantage of the current 15% top tax rate on qualified dividends. With tax rates expected to rise to as much as 43% for some earners next year, companies want to make sure that they're handing over fistfuls of dough while investors still want them.

The casino operator will distribute $2.75 a share to investors on Dec. 18. Las Vegas Sands will be distributing $2.26 billion. What do you think that investors in taxable accounts will do with after-tax proceeds? It's a safe bet that some of that found money will go toward making this a merrier holiday shopping season.

It's not just Las Vegas Sands, of course. Plenty of companies have announced one-time dividends that will go out before the clock winds down on the 15% tax rate for qualified disbursements.

Let's go over some of the companies with beefy declarations.

  • Fellow casino operator Wynn Resorts (Nasdaq: WYNN  ) coughed out a $8 a share dividend -- including its regular quarterly dividend of $0.50 a share -- last week.
  • Sturm, Ruger & Company (NYSE: RGR  ) also knows where to aim. The gun maker will distribute $4.50 a share in cash to its stakeholders on Dec. 21.
  • The board at Tyson Foods (NYSE: TSN  ) isn't chicken. The poultry giant revealed a modest special payout of $0.10 a share.
  • As a foreign-flagged cruise ship operator, Carnival (NYSE: CCL  ) knows a thing or two about legally dodging taxes. The world's largest cruise line is paying a special $0.50 a share disbursement on Dec. 28.

The special dividends come in all sizes, but the end result is that the companies are sending billions in tax-advantaged qualified dividends to its stakeholders at a time when consumers are careful about not maxing out their credit cards.

You won't find too many nice things to say about the fiscal cliff, but here's a case where fears of chunkier tax rates on dividends come 2013 is injecting some serious money into this economy now.

Checks and balances
Subscribers to the Income Investor newsletter can appreciate the companies sending more and more money to their investors. The newsletter singles out companies that are committed to growing their distributions with market-thumping results. A 30-day trial subscription will let you see if it's right for you.

And Las Vegas Sands is more than just a dividend stock; it made a big bet on Macau gaming about a decade ago that's paid off in spades. The company is now looking to spread it's empire further, but will it be able to replicate its prior successes? Learn about all these opportunities, and the risks they pose, in our brand new premium report on Las Vegas Sands. We're providing a full year of analyst updates to go with it, so make sure to claim your copy today by clicking here.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2129086, ~/Articles/ArticleHandler.aspx, 4/19/2014 3:07:39 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement