Case Study: 15.9% Dividend Stock Trade

Every single month, a handful of American companies reward their shareholders with huge dividends.
That’s exactly what happened in January, when one well-known Chicago media company announced a 15.9% special dividend.
The company was Tribune Media (NYSE: TRCO). Tribune Media owns 42 television stations and the national WGN network. Even though the Chicago Tribune newspaper is now owned by Tribune Publishing (NASDAQ: TRNC), the company maintains the Tribune name.
Today, I’m going to show you HOW a select group of investors were able to collect a quick 15.9% gain in just 57 days in a dividend stock trade.
On Dec. 20, 2016, Tribune issued a press release:

Tribune Media to Sell Gracenote for $560 Million

Now, just scanning the headline revealed little helpful information for income traders. Yet, digging below the surface, we found the golden nugget:

“Tribune Media also announced its intention to declare and pay a special dividend of approximately $500 million during the first quarter of 2017 to stockholders and warrant holders. This special dividend would be paid from existing cash. The company plans to continue its existing $400 million share repurchase program, authorized earlier this year, which has approximately $168 million of remaining capacity.”

That news didn’t do anything for Tribune Media shares. In fact, shares were essentially unchanged.
Yet our advanced screening tools alerted us to the news . . . and resulted in Tribune Media shares being added to the Special Dividend Watch List.
Then, 13 days later, Tribune Media followed through on the promise:

Tribune Media Announces a $500 Million Special Dividend

The $5.77 per share dividend would deliver a 15.9% yield, based on the stock price prior to the announcement.
Based upon that announcement, my colleague Steve Mauzy issued an urgent notice.

BUY ALERT: Tribune Media to Issue Special Dividend

The purchase price was $36.25 on Jan. 3.
Eight days later, Tribune issued the special dividend payment.
Shares immediately dropped approximately $6, declining from $36 to $29. It’s no coincidence that the drop in the share price corresponds with the amount of the dividend – this ALWAYS happens.
Precisely for this reason, you may NOT be paying attention to these dividend trades. Yet, you’re probably missing out on what happens NEXT.
By March 1, Tribune Media shares were trading back above $36.25 after the company reported solid fourth-quarter financial results.
Meanwhile, Steve issued a SELL ALERT on the trade. He’d bought the stock for $36.25 on Jan. 3 in this dividend stock trade. And he sold it 57 days later at the same price.
But along the way, he’d collected a $5.77 per share dividend.
That’s a 15.9% profit in less than two months. And on an annualized basis, it’s a very impressive 101.8% profit.
Since then, Tribune Media shares have continued to climb. In May, Sinclair Broadcast Group (NASDAQ: SBGI) announced plans to acquire Tribune Media for $3.9 billion. And ever since then, the stock has been trading above $40.
Most companies prefer regularly dividends, paid out every single quarter.

Dividend Stock Trade: Strict Criteria

A select group of American companies use these special dividends to make huge payouts to their shareholders.
In fact, every month we typically analyze 10 to 15 of these special dividend situations.
Of those, just one or two trades meet Steve’s seven strict criteria for a profitable dividend stock trade.
Some of these trades are small, like the 5.3% payout from CNA Financial (NYSE: CNA) in February. Others are quite large, like the 28.6% special dividend from Leidos Holdings (NASDAQ: LDOS) last autumn.
Historically, the months of November to January are the busiest time for these special dividends.
That’s because companies are moving cash off their balance sheets – and rewarding shareholders – before the end of the year.
Current plans for tax reform may encourage companies to make some big moves.
Do you want to collect huge 15.9% dividends? In just one single day?
This week’s urgent briefing will reveal all the details. Click here to access everything.

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