In general, the temptation for most investors looking for long-term stability and income in retirement is to pick companies with a decent track record over the past decade in providing a growing dividend and consistent capital appreciation.
Having a solid and growing base of income to rely on in one's golden years is the goal, after all, and thus the inclination for many investors approaching a time horizon in which cash withdrawals are expected to increase, holding a stock with a special dividend every one or two years may not seem like the way to go.
A great example of a company which has gone the route of initiating a special dividend in addition to a relatively low regular dividend yield is Costco Wholesale Corporation (NASDAQ:COST).
The company's current yield sits just shy of 1.3%, however the big box retailer has initiated a special dividend every two years since 2012 of $7, $5, and $7, respectively since 2012, pushing some income-focused investors to take a second look at the grocery retailer.
The dividend model of providing minimal basic dividend income alongside large special dividend payouts depending on the performance of the underlying business and the company's balance sheet situation is one which is becoming more common.
Investors interested in achieving a reasonable rate of growth along with yield should certainly consider companies like Costco as a core long-term holding, as these companies provide a unique growth/income profile few others are able to offer.
Invest wisely, my friends.
