Costco Wholesale (COST) DIvidends Date & History

Key Takeaways

• Costco Wholesale (COST) offers a modest dividend yield of approximately 0.52% with an annual payout of $5.20 per share.
• The company has raised its regular quarterly dividend for 22 consecutive years, averaging 12.75% annual growth over the past five years.
• A low payout ratio of 27-33% ensures strong earnings coverage, supporting dividend sustainability.
• Free cash flow (FCF) of $9.1 billion TTM covers dividends multiple times over, bolstering long-term reliability.
• Occasional special dividends, like the $15 per share in 2024, enhance total shareholder returns.
• Ideal for dividend growth investors prioritizing consistency over high current income.

Dividend Overview

Costco Wholesale (COST), the membership-based warehouse club giant, maintains a conservative dividend policy focused on steady growth rather than high yields. The current quarterly dividend stands at $1.30 per share, payable on February 13, 2026, to shareholders of record on January 30, 2026, with an ex-dividend date of January 29, 2026. This equates to an annualized dividend of $5.20 per share and a yield of about 0.52% at recent stock prices around $1,015. Payments occur quarterly, reflecting reliable cash distribution aligned with robust membership fee revenue and operational efficiencies. Costco is classified as a dividend growth stock, emphasizing annual increases over high-yield appeal, supported by its fortress-like balance sheet and expanding global footprint.

Dividend History and Growth

Costco has a proven track record of dividend growth, increasing its regular quarterly payout for 22 consecutive years. The dividend per share has risen from $1.02 in early 2024 to $1.30 currently, with five-year compounded annual growth rate (CAGR) of 12.75% and one-year growth of 12.07%. This consistency stems from strong earnings growth and membership renewals exceeding 90%. Notably, Costco supplements regular dividends with special payouts, including $15 per share in January 2024 and $10 in 2020, demonstrating capital return flexibility without compromising expansion. No cuts have occurred in decades, underscoring a long-term strategy prioritizing shareholder rewards alongside reinvestment.

Dividend Sustainability and Payout Ratio

Costco's dividend is highly sustainable, backed by a trailing twelve-month (TTM) payout ratio of 27.04%, well below 50% thresholds signaling risk. Earnings per share (EPS) of $19.18 TTM provide over 3.7x coverage for the $5.20 annual dividend. Free cash flow reached $9.1 billion TTM, covering dividends roughly 4x after capex, with levered FCF at $6.69 billion adding further buffer. Low debt levels and $43 billion in current assets versus $40 billion liabilities enhance stability. Projections show FCF growing to $12 billion by 2030, supporting continued hikes amid modest payout trends historically around 28-30%.

Dividend Compared to Industry Peers

Costco's 0.52% yield trails retail peers like WMT at 0.79% (payout ratio 34%) and TGT at 3.8% (payout 55%). Consumer defensive sector average exceeds 2.5%, reflecting Costco's premium valuation prioritizing growth. However, its superior 12%+ dividend growth outpaces Walmart's 9% and Target's 1.8%, with a lower payout ratio enabling sustainability. Special dividends periodically boost effective yield, positioning COST favorably for total return in the discount stores subsector.

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Is This Stock Attractive for Dividend Investors?

Costco Wholesale (COST) appeals primarily to dividend growth investors seeking reliable increases over high current yields. Its 22-year streak of raises, averaging double-digit growth, suits those prioritizing compounding payouts amid stock appreciation. Conservative investors value the ultra-low payout ratio and FCF coverage, minimizing cut risks even in downturns. Long-term holders benefit from special dividends enhancing returns, though the modest 0.52% yield may deter pure income seekers favoring 3%+ options like Target. Balanced portfolios gain from Costco's defensive moat—recurring membership fees and 90%+ renewals—providing stability versus cyclical retail peers. Growth-oriented dividend investors may find it compelling, given projections for continued EPS and FCF expansion supporting hikes. However, elevated valuation demands patience for total returns blending dividends and capital gains.

Disclaimer

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