Why PagSeguro Digital Stock Soared Almost 13% Higher Today

The Motley Fool·06/16/2025 22:52:36

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There's nothing like an unexpected payout to juice interest in a stock. The market was clearly caught a little off guard by PagSeguro Digital's (NYSE: PAGS) announcement of a special cash dividend, and it reacted accordingly. Investors piled into the Brazilian fintech to the point where it closed the day nearly 13% higher, a far better improvement than the under 1% gain posted by the S&P 500 index.

A special announcement

That morning, PagSeguro announced that it will pay its stockholders $0.12 per each of its common shares as a special dividend. This is to be dispensed on Aug. 15 to investors of record as of July 16.

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Person stuffing money into a piggy bank and smiling.

Image source: Getty Images.

That's only the first in a series -- the company added that it aims to make two additional special dividend payouts. These should match that $0.12 per share distribution and be paid within the coming three quarters.

Dividends have been a theme for PagSeguro lately. The company, which went public on the U.S. market at the start of 2018, declared its first regular dividend in mid-May. This amounts to $0.14 per share and was paid out to stockholders earlier this month.

Like the inaugural special dividend, this isn't intended to be a one-off. PagSeguro said that it aims to pay an annual dividend every year corresponding to roughly 10% of its distributable net income.

Quite the shareholder-pleasing measure

The Brazilian fintech space certainly has vast room to grow, given the cutting-edge offerings of PagSeguro and its peers in the vast yet under-banked country.

The company's new(ish) dividend policy adds to the attractiveness of the stock, which has already been bolstered by solid financial performance -- even if the company's first quarter was considered by some to be lackluster -- and consistent profitability.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends PagSeguro Digital. The Motley Fool has a disclosure policy.

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