by Marc Bastow | December 4, 2012 12:05 pm
Leave it to Larry Ellison to one-up everyone else.
Although the flamboyant CEO of Oracle (NASDAQ:ORCL) had nothing to do with the measure (at least by Oracle’s account), the company announced that it would not only accelerate its second-quarter 6-cent dividend payment into December (instead of January), but it also would include Q3 and Q4 payments, too. That means ORCL shareholders of record on Dec. 14 will see an 18-cent payout Dec. 21.
Oracle’s largess is, of course, in keeping with the holiday spirit embodied by companies who have recently announced they will accelerate fourth-quarter dividends — Disney (NYSE:DIS), Costco (NASDAQ:COST) and Walmart (NYSE:WMT), among others — allowing shareholders to beat any hike in dividend tax rates in 2013.
That said, Oracle’s move is not to be confused with a “special dividend” of the kind being paid out to shareholders by Las Vegas Sands (NYSE:LVS), Brown-Forman (NYSE:BF.B) and Dillard’s (NYSE:DDS). The ramifications to a one-time special dividend are outlined here, the biggest being pricing pressure on the stock after the payout.
Oracle’s stock price shouldn’t be affected in any meaningful way. The December payout will cost the company just more than $867 million, but the company sits on more than $31 billion in cash and investments (and they’re dividend payments the company planned on making anyway).
On the investor-interest side, the accelerated three-at-once dividend still only results in a small one-time yield of 0.55%. (ORCL yields a paltry 0.75% annually.)
Heck, some shareholders might be disappointed that they didn’t get a special dividend.
Lastly, let’s not forget that, as is the case with many other “generous” dividend-payers this holiday season, the biggest Christmas cheers will be coming not from Mom ‘n’ Pop, but from major shareholders.
For ORCL, that’s none other than Mr. Ellison himself, whose 1.1 billion shares will get him a $198.9 million payout, according to Thompson Reuters data.
It might just be time for another yacht.
Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.
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