Software company, Oracle Corporation(ORCL) reported on Tuesday that they will be paying a large portion of their 2013 dividends this month, to avoid possible fiscal cliff tax increases.
The company announced that they will be paying three quarters of their 2013 dividends during the month of December, which were previously going to be paid in January, April, and July.
Oracle is one of many companies paying their dividends ahead of time in order to allow their investors to avoid the potential tax increases due to begin on January 1. Dividends, which are currently taxed at a rate of 15% could increase more than half, depending on individual investors tax brackets.
A total of 18 cents per share will be paid this month, which will have a significant benefit on the company’s largest shareholder, CEO, Larry Ellison, who owns 1.1 billion shares of ORCL, totaling $198.9 million in dividend payments this month. Although the company reported that Ellison had no influence on the decision to move up dividends, he, as well as other large stakeholders will benefit the greatest from this acceleration.
Many investors hoped to see the company payout a special dividend this month, but with the regular dividends moved up, and no reports of any type of special dividend, it is highly unlikely.
Oracle shares were down 16 cents, or -0.5% during premarket trading Tuesday. The stock is up 25.96% YTD.
The Bottom Line
Shares of Oracle Corporation (ORCL) have a .74% dividend yield, based on last night’s closing stock price of $32.31. The stock has technical support in the $28-$29 price area. If the shares can firm up, we see overhead resistance around the $33-$35 price levels.
Oracle Corporation(ORCL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.