Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of generator and power products manufacturer Generac Holdings (Nasdaq: GNRC) charged higher by as much as 15% following the distribution of a special dividend to shareholders.

So what: In late May, Generac announced that it had replaced an older $575 million loan facility with $900 million of secured term loans at a lower interest rate. In accordance with the money the company will be saving in interest expenses, Generac chose to declare, at that time, a one-time special cash dividend of $6 per share. The dividend was to be funded by a mixture of cash on hand and debt and was paid out earlier this morning.

Now what: Special dividends are nice, but they aren't a reason to get too excited. The amount of the dividend is simply removed from a stock's share price and, as with a stock split, the sum of what you have is still the same. I'd rather Generac have declared a smaller quarterly dividend instead, which would have attracted income-seeking investors. Instead, Generac chose to finance the deal with debt, which is a questionable decision in my view. I like Generac's products and feel they border on being a necessary item, but today's move higher because of the special dividend seems a bit overdone.

Craving more input? Start by adding Generac Holdings to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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