AOL Inc. (NYSE: AOL
) announced Monday it would divvy out $1.1 billion in cash to shareholders, joining the growing group of dividend-paying stock
s - although only for brief moment.
AOL will dole out a one-time payment of $5.15 a share to holders of record Dec. 5, for a total of $500 million given out in dividends.
In addition to the whopping and unexpected dividend news, AOL also reported a $600 million fast-tracked share repurchase agreement with Barclays Plc (NYSE ADR: BCS
The move comes on the heels of a deal inked in April to sell 800 patents to Microsoft Corp. (Nasdaq: MSFT
). At the time, AOL assured its plans were "to return a significant portion of the sale proceeds to shareholders."
The move also follows a push from activist shareholder group Starboard Value LP, which had been lobbying for AOL to unload its patent cache and reward shareholders with a dividend and share repurchase program.
Investors applauded the dividend news, sending shares of AOL up more than 3% Monday. The stock has been on a tear, climbing more than 120% year-to-date.
While AOL has only planned a one-time dividend, many other companies in 2012 have announced regular payouts.
Dividend-Paying Stocks: Payouts on the Rise
A number of companies are beginning to recognize just how important dividends have become in this era of low-interest savings accounts and certificates of deposits (CDs) that offer paltry yields.
In fact, dividends, once a trademark of stodgy blue chip companies, are emerging in full force in the tech sector.
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