Hi George, just to let you know that your shareholders were very pleased to receive your most generous surprise dividend announcement yesterday, so thanks for the early Christmas gift. Really $1 Billion is a big gift!
“TORONTO, Dec. 15 /CNW/ – George Weston Limited (“Weston”) (TSX: WN) announced today that it will pay a special one-time common share dividend of $1 billion, representing $7.74751 per common share, on January 25, 2011 to all common shareholders of record at the close of business on January 18, 2011.”
On Dec. 15th George Weston (WN) closed at $79.38 per share, so this special dividend is a 9.76% return on equity. For anyone who purchased WN before the ex-dividend on the 13th, you would have also received the regular dividend for an additional 0.36 cents per share.
Unfortunately I was not one of those investors holding George Weston (WN) as it was trading very close to its 52 week highs. And most unfortunately I did not have enough cash in my TFSA or RRSP when the announcement came out on the 15th, as the stock was trading below $80. I would have loved to have been on this first thing in the morning with a limit order for $80. However I was able to get some funds transferred and that was enough to get me in the door with 10 shares @ $83. I think the stock will increase even more before the January 18th dividend date. Time will tell, but I think this will be a nice short term play, and a sweet $77.47 dividend for my 15 minute effort.
All you have to do is purchase George Weston (WN) before Jan 18th record date (by the 12th to be sure) to get in on this sweet deal. But be forewarned, WN is trading at its 52 week highs, and the stock market is anything but predictable. So there is always the possibility you may lose on the share price. If you are going in big, then keep a stop loss (maybe around $75 to $79).
The lesson I learned this week, it’s always good to be holding a whack of cash in your brokerage account, just in case an opportunity like this presents itself. So for the future the Dividend Ninja will keep a minimum of 5% cash in each of his RRSP and TFSA accounts!
The dates for the George Weston special dividend (according to the Globe and Mail website) are as follows:
Jan. 14th ~ Ex-Dividend Date (purchase by the 13th)
Jan. 18th ~ Record Date
Jan. 25th ~ Payment Date
update ~ Jan. 20th
This morning I reached my loss point, and sold at $71. Had I sold first thing on the ex-dividend on the 14th around $80, I would have made a nice return. So with the special dividend of $7.75 per share and loss in share price I am down over 7.5%. But the $62 loss is minimal and a good lesson.