Editor’s Note: The last gift has been unwrapped. The cookie tin is empty but for a few crumbs. And some of you have already put the lights and decorations back in the attic.

Another holiday season has come and gone.

Yet, as we speak, early go-getters (and bargain hunters) are already getting a jump-start on next Christmas. I’m more of a procrastinator. But not when it comes to my portfolio. In fact, I’ve already got my eye on a potential candidate that could make for a nice addition later this year. Or possibly even right now. Let me explain.

Cold, Hard Cash Under the Tree

There are dozens of companies that like to hand out sizeable special dividends at the close of the calendar year. Most of these payments are variable in nature, linked in some way to profits or cash flows generated over the previous 12 months.

But one payer has been particularly generous.

I first recommended the stock to my High-Yield Investing readers in December 2022, calling attention to a pending special dividend of $15 per share. I flagged it again the following December, just days in advance of a $20 per share distribution. And then again last month, right before it gift-wrapped a year-end payment of $25 per share.

For those of you keeping score, that’s a trio of Christmas “bonuses” totaling $60 per share over the past 36 months. That’s on top of the regular quarterly dividends (which also show a nice upward trend). They are currently set at $0.25 per share, meaning this latest special distribution was equivalent to 100 dividends in a single payment.

And there is every reason to believe the company will deliver an encore in 2025.

It might surprise you to hear that I’m referring to Dillard’s (NYSE: DDS), an old-school haberdashery that also sells cosmetics, luggage, upscale home décor and other curated products. There are about 275 locations in urban shopping centers from California to Virginia.

Given the decline of the American shopping mall, you might assume that Dillard’s hefty dividends are a creative financial tactic meant to distract from a sagging share price. But that’s not the case. In fact, they are the lesser part of the total return picture. Over the past five years, DDS shares have streaked from $70 to $450.

That spectacular 500%+ advance doesn’t just crush the firm’s immediate peer group – it even outpaces Apple (NSDQ: AAPL)…and Amazon (NSDQ: AMZN) too, for that matter.

Who says department stores are dead?

Dillard’s was founded in Arkansas about 90 years ago. I happen to live just a few miles away from its corporate office on Cantrell Road in Little Rock, as well as the flagship location at the Park Plaza Mall. (Remember where you park; twin stores anchor both the east and west ends of the mall.)

Dillard’s does things a bit differently than most of its rivals. That’s a good thing, considering Kohls (NYSE: KSS) and Macy’s (NYSE: M) have lost money for investors over the past several years. Other players have been forced into bankruptcy, or pressured by activists to enact dubious changes.

Dillard’s may not be flashy, but it keeps a finger on the pulse of fickle fashion trends. From a strategic standpoint, it occupies the middle ground, somewhere in between mass-market discounters and luxury retailers. Most recently, it introduced a collaborative new line of clothes, shoes, and accessories designed by one of the nation’s most widely followed fashion influencers.

The walkways aren’t cluttered with a hodgepodge of mismatched goods. And you won’t see margin-pinching 50%-off clearance sales to get rid of unsold merchandise. The results speak for themselves. The company has hauled in $6.6 billion in revenues over the past 12 months, pocketing more than $600 million in net income.

On a comparable, same-store basis, sales are tracking about 4% lower than last year. But on the positive side, Dillard’s maintains healthy gross margins north of 45%, thanks in part to optimal inventory management techniques and tighter cost controls. And the business has stockpiled over $1 billion in cash and liquid investments on the balance sheet.

Solidly in the black, Dillard’s utilizes another tool to enhance shareholder value: stock buybacks. Management has sunk $100+ million into repurchases over the past three quarters, systematically shrinking the number of outstanding DDS shares to 16.1 million. That’s a reduction of 300,000 over the past year, 1.6 million over the past two years, and 5 million over the past three years.

Read This Story: Rewarding Shareholders Behind the Scenes

The firm’s 30,000 employees hold nearly one-third of the outstanding shares, which never hurts in the customer service department. And the founding Dillard family keeps a tight rein on the voting stock (as well as the boardroom).

They generally avoid the media spotlight. According to Fortune magazine, this is one of just 20 Fortune 1000 firms that doesn’t conduct quarterly conference calls with Wall Street analysts. That may sound guarded, but it lets these seasoned retail veterans call the shots without undue outside influence.

You might even think of Dillard’s as a quasi-private company. But the books are fully transparent. And it’s always reassuring to sit at the same table with insiders who “eat their own cooking.”

CEO William T. Dillard II referred to the firm’s special dividends as a “reward,” one mostly bestowed on owners and employees, yet still accessible to you and me. It wouldn’t surprise me to see the organization eventually get taken private, which incidentally, just happened to Nordstrom (NYSE: JWN) in a $6.2 billion transaction.

In the meantime, changing shopping behaviors and other macro headwinds persist, but the omnichannel Dillard’s brand is clearly alive and well. Recent new product launches should help further consolidate market share from tired rivals and spur top-line growth…which just might mean a $30 special dividend next time.

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