Just wondering how you treat special dividends when doing fundamentals. I am in the process of setting up some spreadhsheet models and inputting real information in the hope this will give me a clearer picture of how it all sits together.
Dividend payments affect so many calculations including CGVI and I was wondering whether special dividends are included in total dividends for a year.
I am looking at FWD and noticed they had paid special divs for the past three years - is that normal? This takes their payout ratio to over 100% for the past three years and skews the ratios. I know good dividends are appreciated by some, but shouldn't the company be using profits to expand the business, or has FWD decided not to expand its operations?
Commsec have not included the spec div in their div per share data for 2007, but has included it in previous years.
Just learning and will probaby have more questions to follow as I dig deeper.
Thanks
Troppo

Troppo,

I noticed your post is your first contribution. it is indeed a sensible question, and deserves an answer

From memory the FWD thread has a big dicsussion on the issue of Special Dividends and treatment thereof. If you click onto Advanced search (top RH corner) and parenthesise your request, it will narrow the field. Alot of the discussion is concerning the CVGI concept and related issues , and you may require someone more attuned to this treatment than me to help you through.

good luck and welcome

Special dividends usually come in a three years period ( see ARP for instance ) when company has accumulated franking credits at such a ratio to equity that it deserves a special payout .
Fleetwood's SIX years of EXTRA 40c per share PER ANNUM is unusual and perhaps unprecedented .FWD has had a 4-5 years strong acuisition programe which had to be halted to allow the compant consolidate all the new acquired businesses into their traditional companies . During the process the company sold for $28m a business it did not want to be in anymore . The company will go on distributing the extra 40c until ( and inclusive of ) FY2010 , prodided : profitability goes on intact and no majour acquisition is made . In the case of FWD , being special for past 3 years , current FY and next 2 years , the 6 years have basically told the market that the company's operating cashflows have allowed it to to do so without infringing a bit on its gearing .
Another company that has had many special dividends is SFC ( Shaffer Corp )
Other high dividend distribitors have been : MXI and ADG ( no specials here though )
Usually periodical special dividends should not be part of the data used for FA . Actually any ONEOFF CHARGE or BENEFIT are excluded .I do not include special dividends in CGVI calculations .
We hold shares in some the companies mentioned in my post ...Cheers eGilmore

Thanks for the replies. I looked through the FWD posts which were generally interesting reading. I thought taking the special div out of the FA spreadsheets was the way the go. Will also have a look at those other companies with high divs and special dividends.
Regards, Troppo