What is a special dividend?

Written by Editorial Team | Last Updated: August 2026

A special dividend is a non-recurring, one-off distribution of corporate cash or assets paid by a company to its shareholders, separate from and in addition to the company's regular periodic dividend schedule. Corporations typically issue special dividends when they experience a wind-fall profit year, complete a massive asset divestiture, or accumulate excess cash reserves that exceed immediate operational reinvestment needs. While shareholders welcome these sudden financial windfalls, stock prices typically adjust downward on the ex-dividend date by an amount roughly equivalent to the payout value distributed.

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