In morning trade the Suncorp Group Ltd (ASX: SUN) share price is on course to finish the week on a positive note.
At the time of writing the insurance and banking giant's shares are up 1% to $13.30.
Why is the Suncorp share price pushing higher?
At the end of last month Suncorp announced the successful completion of the sale of its Australian Life Business to TAL Dai-ichi Life Australia for a total consideration of approximately $725 million.
Following the completion, management advised that after taking into account separation and transaction costs, hybrid capital and other provisions, it expected to return approximately $600 million of capital to shareholders.
This morning the company announced that the Suncorp board has determined to pay a fully franked, special dividend of 8 cents per share. Suncorp's shares will trade ex-dividend for this special dividend on April 1, with payment expected just over a month later on May 3.
As you might have noticed, an 8 cents per share and its current share count does not equate to $600 million.
According to the release, the special dividend represents just $100 million of the net proceeds from the sale of the business.
Management advised that the "preferred means of distributing the balance of the capital generated from the sale (expected to be around $500 million) continues to be through seeking shareholder approval for a pro-rata return of share capital and share consolidation, which remains subject to shareholder approval."
The company intends to provide the market with more information on this process in the coming months.
Should you invest?
Whilst a special dividend is always nice, this one is extremely small and offers a yield of just 0.6%. As such, I wouldn't buy Suncorp's shares purely on the back of this announcement.
Overall, whilst I think its shares are fairly priced, I'm not a buyer of Suncorp or rivals Insurance Australia Group Ltd (ASX: IAG) and QBE Insurance Group Ltd (ASX: QBE) due to their inconsistent performances.
