The stock of Costco Wholesale (COST) is at a 52-week high after the grocery retailer raised its quarterly dividend by 13%.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
COST stock traded as high as $1,070.67 per share on May 18, bringing its year-to-date gain to 24%. The shares got a boost after Costco announced a 13% increase to its quarterly dividend, taking it to $1.47 per share. Going forward, Costco will pay an annualized dividend of $5.88 a share.
The increased dividend should take the yield on COST stock above 0.60%. The warehouse club has not hiked its distribution to shareholders for 22 consecutive years. Costco is close to becoming a Dividend Aristocrat, defined as a company that has increased its dividend payment for at least 25 consecutive years.
A Special Dividend?
While investors are cheering the latest rise in Costco’s base dividend, many are still holding out for a one-time special dividend to be issued by the company. Costco has a history of paying hefty special dividends to shareholders every few years.
Costco typically issues a large special dividend every two to three years when excess cash builds up on its balance sheet. The last special dividend of $15 a share was announced in December 2023 and paid in early 2024. Analysts and investors say the company is due to issue another special dividend.
Is COST Stock a Buy?
Costco’s stock has a consensus Moderate Buy rating among 22 Wall Street analysts. That rating is based on 15 Buy, six Hold, and one Sell recommendations issued in the last three months. The average COST price target of $1,098.44 implies 3% upside from current levels.
