Costco (COST) Rewards Shareholders with a Hefty Dividend Hike

Costco Wholesale (COST) has announced a double-digit increase to its quarterly dividend, reflecting the retail giant’s strong financial position and commitment to reward shareholders. The company said its board of directors approved a quarterly dividend of $1.30 per share, up 12% from the previous payout of $1.16 per share, bringing the annual payout to $5.20 per share. The new dividend will be paid on May 16 to shareholders on record as of the close of business on May 2. Based on yesterday’s closing price of $967.75, Costco’s current dividend yield is nearly 0.54%. While this is an improvement from the 0.47% yield previously, it remains below the Consumer Cyclical sector’s average yield of 1.05%. What Supports Costco’s Dividend Hikes? The company has a strong track record of dividend growth, having raised its payout for 20 consecutive years. Further, COST has a history of rewarding shareholders with special dividends following periods of stellar financial performance. For instance, the company issued a substantial $15 special dividend in January 2024 after a strong 2023. These consistent dividend hikes are primarily supported by Costco’s strong financial performance. The company has been witnessing steady revenue growth due to its membership-based model and efficient operations. Moreover, the company’s ongoing expansion into new markets and e-commerce growth helps ensure steady revenue growth, supporting its ability to raise dividends. Also, COST’s focus on cost control helps maintain profit margins and enables it to return value to shareholders. Overall, Costco’s steady dividend growth could make it appealing to investors seeking long-term investment ideas. Is COST a Good Stock to Buy? Turning to Wall Street, COST stock has a Moderate Buy consensus rating based on 20 Buys and seven Holds assigned in the last three months. At $1,086.58, the average Costco price target implies a 12.28% upside potential. Shares of the company have gained 9.6% over the past six months. See more COST analyst ratings. Disclaimer & DisclosureReport an Issue