National Beverage Corp.'s shares jumped Friday after the company declared a special cash dividend.
THE SPARK: The soft-drink maker said it would pay a dividend of $1.50 to $3 per share to shareholders of record as of Dec. 5. The Fort Lauderdale, Fla., company said it will finalize the payment by Nov. 30 but it will be made during 2012 to take advantage of current tax rates. It currently does not pay dividends regularly.
THE BIG PICTURE: National Beverage is one of a number of companies to issue a special end-of-year payment to protect investors from potentially having to pay higher taxes on dividend income starting in January.
Since 2003 investors have paid a maximum 15 percent on dividend income, but that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending. As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
SHARE ACTION: Shares of National Beverage, which makes Shasta, LaCroix and other drinks, increased nearly 15 percent to $16.87 in midday trading. Its stock is nearing the top of its 52-week trading range of $13.30 to $17.39.