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With the potential for less favorable tax treatment ahead, companies have been announcing "special dividends" like never before. Many of the companies are specifically citing "excess capital", so I take these payments as a sign of confidence as well. With many managers being measured these days on metrics like return on capital, it behooves the executives to lower the denominator by returning cash. My guess is that this money will end up being reinvested to a great degree. This table isn't meant to be a complete recitation of the many recent declarations, but it should give us a flavor:

Special Dividends
I highlighted in dark green the dividends that exceed 10% of the market value of the company and in light green those between 5% and 10%. As you can see, there are several substantial payments. While the value of the stock drops immediately to reflect the dividend payment, to the extent this is really just extra cash and to the extent investors weren't incorporating it into their valuation (some do, many do not), shareholders could actually benefit as the stock ultimately recovers the drop from going ex-dividend. This begs the question: Who's next?

I don't have an easy way to produce a large list of names in a short amount of time, but I will share this clue: Look for high insider ownership and excess cash. One that comes to mind is National Presto (NYSE:NPK), which has a tradition of making its large one-time dividends in March but that could accelerate it into 2010. Another one that comes to mind is Skecher's (NYSE:SKX). I don't think that the companies need to necessarily have the cash. If they are underleveraged (as several on the list above were), they could still make a payment. I think Flowers (NYSE:FLO) is one that fits this description well. Given that many of these stocks are rallying on the declarations of the special dividends, it makes sense to give it some thought.

Disclosure: Long FLO and NPK in the Conservative Growth/Balanced Model Portfolio and long SKX in the Top 20 Model Portfolio at Invest By Model