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Thor logoSeveral schools of thought surfaced Monday (Oct. 5) after Thor Industries Inc. announced its board of directors had authorized a special, one-time special dividend of 50 cents per share. The special dividend is payable on Oct. 27 to shareholders of record on Oct. 16 and is in addition to Thor’s regular quarterly dividend of 7 cents per share.

The announcement at the least made a “buzz” in the RV industry and on Wall Street where the stock trader higher on moderate volume. It closed the day at $31.18, up $1.49.

One school held that Thor, with $328 million in cash ($6 per share) and 55 million shares outstanding, was acknowledging to its shareholders that the worst was over and that it can afford to pay out $27 million in dividends, in a “We’re so healthy, we don’t need the cash,” as one outside observer of the RV industry told RVBUSINESS.COM.

Another observer, Craig W. Kennison of Robert W. Baird & Co., noted that by virtue of the fact that Thor is able to do this just underscores that it has the strongest balance sheet in the RV industry. No other publicly held company in the RV industry is able to make such a special payout to its shareholders. Making this move this week as RV dealers convene for their national show in Las Vegas also sends that message of industry strength to its dealers, he said.

Kennison said the special dividend is not “insignificant” but he cautioned against making too much of the decision.

Kennison, whose investor notes to clients appear routinely in RVBUSINESS.COM, said the special dividend is “worthy of mention,” but added, “We’re not writing about it in a meaningful way.”

The dividend yield on Thor stock tends to be below industry averages, but the special dividend kicks the yield up to 2.6% which is on par with the average yield on S&P stocks, Kennison noted.

Special dividends are not out of the ordinary for Thor, Kennison said, noting that the company paid a special 25-cent-per-share dividend during its 25th anniversary year.

Another observer contended that the special dividend was a way Thor is stating that, while it remains in an acquisition mode, it’s not acquiring anything at present.

“This (special dividend) would not prevent them from pursing a deal,” Kennison countered, but he added, “It may indicate they don’t have a lot on the table.”

At the very least, the special dividend shows that times are better, Kennison said.