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Number of Companies Paying Special Dividend Rising Rapidly in 2012 as Dividend Tax Increase Looms

NEW YORK, NY--(Marketwire - Dec 5, 2012) - A dividend tax increase has been a major concern for investors as the upcoming fiscal cliff approaches. Major companies such as Las Vegas Sands and Wal-Mart have declared special dividends or have moved up quarterly dividend payments in attempts to avoid the looming tax increase. According to Bloomberg, from the end of September to mid-November 59 companies in the Russell 3000 stock index have paid special dividends, compared to just 15 one year-ago. Five Star Equities examines the outlook for dividend yielding companies and provides equity research on Bristol Myers Squibb Co. ( NYSE : BMY ) and Pfizer Inc. ( NYSE : PFE ).

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U.S. investors are set to face a dividend tax increase in the New Year. The current top tax rate on dividends of 15%, which was set in the Bush-era, will expire in January. If lawmakers fail to take action dividends will be taxed at the same level as wages and salaries in 2013. President Obama's plan would see the top tax rate on dividends rise to 39.6 percent for high-income earners, which doesn't include the new 3.8 percent tax on investment income added by Obama's health-care law.

"The prevailing fear is that if taxes for dividends increase, dividend yielding companies could grow less attractive and could see a multiple de-rating," said Savita Subramanian, a strategist at Bank of America Merrill Lynch.

Five Star Equities releases regular market updates on dividend yielding companies so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

Bristol Myers Squib's Board of Directors has recently announced a 3.0 percent increase in the company's quarterly dividend, beginning in the first quarter of 2013. The increase will results in a quarterly dividend of $0.35 per share, or a 2013 full-year dividend of $1.40 per share. Shares of Bristol Myers Squib have fallen over 7 percent year-to-date.

Pfizer currently offers investors an annual dividend of $0.88 per share for a yield of approximately 3.5 percent. The company is targeting a dividend payout ratio of approximately 40 percent by the end of 2013. Pfizer has recently completed its sale of its Nutrition business to Nestle for $11.85 billion in cash.

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