By Sabrina Escobar
Costco Wholesale is boosting its quarterly dividend by double-digits, the company said Wednesday.
Costcos' board bumped up the company's quarterly dividend payout to $1.30 per share, or $5.20 for the year, marking a 12% increase from its previous dividend of $1.16 a share. The quarterly dividend is payable May 16 to shareholders of record at close of business on May 2, Costco said.
The increase brings up Costco's dividend yield to about 0.54%, based on Barron's calculations. While that is higher than the 0.49% notched in the fiscal year ended last August, it is below Costco's five-year average dividend yield of 0.66%.
It's also below many of Costco's competitors. The dividend yield for the SPDR S&P Retail ETF was 1.38% in the 2024 calendar year. In the fiscal year that ended January, Walmart's dividend yield was 0.85%, Target's was 3.3%, and Kroger's was 1.97%.
Costco's dividend payout ratio, or the proportion of earnings that it returns to shareholders, has also historically been smaller than its peers. In its latest fiscal year, it had a payout ratio of 26.3%; Walmart's ratio was 34.5%, Target's 50.4%, and Kroger's 1.97%, according to FactSet.
That may not matter much to investors, who are used to the relatively small regular dividend. While Costco isn't a high-yield stock, it has a history of reliably increasing its quarterly payouts about once a year, which is often a nice perk for investors who already see Costco stock as an attractive long-term holding.
Plus, the company occasionally issues special dividends to reward investors after a particularly strong year. For instance, it issued a $15 dividend in January 2024 following a gangbusters 2023, and paid out a $10 dividend on December 2020.
Costco stock was ticking up 0.4% to $971.26 in after-hour trading Wednesday. The shares are up 5.6% compared with the S&P 500's 10% decline.
Write to Sabrina Escobar at sabrina.escobar@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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April 16, 2025 17:40 ET (21:40 GMT)
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