7% Dividend Yield Camoflagued as 3% Yield

Espey Manufacturing & Electronics Corp (ESP) is a power electronics design and original equipment manufacturing company with a long history of developing and delivering products for use in military and severe environment applications. All design, manufacturing and testing is performed in its more than 150,000 square-foot facility located at Saratoga Springs, N.Y.

ESP has paid a special dividend of at least $1.00 per share for each of the last five fiscal years 2008, 2009, 2010, 2011 and 2012. The special dividend should be treated as an ordinary dividend because of its recurring nature and the significant net cash balances. The readjusted dividend yield should be 7% instead, making the stock much more attractive.

Source: Guru Focus

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