Guide · Markets
Special Dividends Explained: One-Time Payouts and Ex-Dates
A special dividend is a one-time cash payout on top of a company's regular dividend. Costco declared one of $30 a share on November 10, 2026, about $13.3 billion in total.
After the US close on Tuesday, November 10, 2026, Costco told the SEC that its board had declared a special cash dividend of $30 a share, payable on December 4 to shareholders of record on November 24, about $13.3 billion in total. The company's regular quarterly dividend, $1.47 a share, was untouched, and the board added a new $4 billion buyback authorisation running to 2030. The shares rose about 1.9% after hours. It was Costco's largest special payout, after $15 a share in January 2024 and $10 in December 2020.
A special dividend, sometimes called an extra or one-time dividend, is a cash distribution that sits outside a company's normal dividend schedule. A regular dividend is a promise investors expect to see repeated; cutting it is read as bad news, so boards set it at a level they are confident they can sustain. A special dividend makes no such promise. Companies use it to hand back cash that has built up beyond what the business needs: after an asset sale, a legal settlement, a year of unusually strong cash flow or, in Costco's case, a balance sheet that generated cash faster than new warehouses could absorb it.
Four dates matter. The declaration date is when the board announces the payout. The record date is when the company checks who owns the shares. The ex-dividend date is the first day the stock trades without the right to the payment, and the payment date is when cash arrives. Since the US moved to next-day (T+1) settlement in May 2024, the ex-date for an ordinary payout is normally the same day as the record date. There is one important exception: when a distribution is worth 25% or more of the share price, US exchange rules set the ex-date to the first business day after the payment date, so the stock carries the dividend until the cash has actually been paid.
On the ex-date the share price usually drops by about the amount of the dividend, because the cash has moved from the company to its owners. A $30 dividend on a stock near $1,000 is roughly a 3% drop that has nothing to do with the market's view of the business, and charts that do not adjust for dividends can show it as a gap down. Exchange-listed options are adjusted for special dividends of at least $12.50 per contract, which means 12.5 cents a share, so the strike prices of Costco options will be reduced rather than leaving holders exposed to the drop. Regular dividends, by contrast, are not adjusted and are priced into options in advance.
Why a company chooses a special dividend over a buyback says something too. A buyback is flexible and can be paused; it rewards shareholders who stay and benefits from buying when the price is low. A special dividend pays everyone the same amount immediately and is taxed as income in the year it is paid, which is why large payouts often cluster in December when tax rates are expected to rise. Microsoft's $3-a-share special dividend in December 2004, about $32 billion, remains one of the largest ever.
When a special dividend is announced, check four things. Is it funded from cash on hand or from new debt? A payout financed by borrowing changes the balance sheet more than one paid from surplus cash. Does it come with a change to the regular dividend or the buyback? How large is it relative to the share price, which tells you whether the 25% ex-date rule applies? And what does it say about investment plans? A company returning cash in one lump may be signalling that it does not see projects worth more than that cash, which is good discipline but also a hint about future growth.