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AOL Offers a 15% Special Dividend

AOL Inc. (NYSE: AOL) authorized a special, one-time, cash dividend of $5.15 per share, payable on December 14, 2012 to shareholders of record at the close of business on December 5, 2012.  AOL does not currently pay a regular dividend.  Based on the current AOL stock price, the $5.15 special dividend will result in a dividend yield of 15%.

AOL has agreed to repurchase $600 million worth of common stock under the ASR Agreement, utilizing the share repurchase authorization previously approved and an incremental $10 million authorized by the Company on August 26. AOL will pay the $600 million at the beginning of the ASR Agreement and expects to receive shares throughout the remainder of the year and a substantial majority of the shares underlying the transaction before year-end, including approximately 4 million shares that Barclays will deliver to AOL onAugust 30.

The moves underscore AOL’s desire to establish a new image — a shareholder-friendly reputation — following years of presenting haphazard strategies and poorly received initiatives.

AOL has an equity summary score of 7.7 out of 10 for a Bullish outlook.

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