PriceSmart (PSMT) DIvidends Date & History

Key Takeaways

• PriceSmart (PSMT) pays a semi-annual dividend of $0.70 per share, totaling $1.40 annually, with a forward dividend yield of approximately 0.74%.
• The company has raised its regular dividend for four consecutive years, most recently delivering an 8.6% increase in early 2025 to $1.26 per share annually, followed by an 11.1% increase to $1.40 in early 2026.
• The payout ratio sits at roughly 27%, indicating conservative dividend coverage and substantial room for future increases.
• Free cash flow comfortably covers the dividend, with the annual dividend obligation of roughly $42 million well-supported by free cash flow that exceeded $103 million in fiscal 2025.
• While the yield is below the broader consumer defensive sector average, the combination of a low payout ratio and a double-digit dividend growth rate makes PSMT an attractive consideration for dividend growth investors.

Dividend Overview

PriceSmart, Inc. (PSMT), the operator of 54 membership warehouse clubs across Latin America and the Caribbean, maintains a semi-annual dividend policy—distributing payments twice per year rather than quarterly. The current annual dividend stands at $1.40 per share, paid in two equal installments of $0.70 each. At recent trading levels, this translates to a dividend yield of approximately 0.74%, well below the consumer defensive sector average of roughly 2.6%. The company is best categorized as a dividend growth stock rather than a high-yield play. In April 2024, PriceSmart also distributed a special one-time dividend of $1.00 per share, reflecting the board's confidence in the company's cash-generating capabilities. The most recent ex-dividend date was February 17, 2026, with the next ex-dividend date scheduled for August 17, 2026, and payment on August 31, 2026.

Dividend History and Growth

PriceSmart has built a consistent track record of returning capital to shareholders. The company has paid regular dividends every year for over a decade, with the semi-annual payment cadence remaining stable since at least 2010. After holding the annual dividend flat at $0.70 per share from 2014 through 2021, PriceSmart entered a new growth phase in 2022. The annual dividend rose to $0.86 in 2022, then to $0.92 in 2023, $1.16 in 2024, $1.26 in 2025, and $1.40 in 2026. This represents a five-year compound annual growth rate (CAGR) of approximately 12.5% and a three-year CAGR of approximately 13.6%—figures that rank among the top quartile of the consumer defensive sector. The board has explicitly linked dividend increases to confidence in the company's financial performance and cash flow strength, signaling that future increases are likely contingent on sustained operational momentum.

Dividend Sustainability and Payout Ratio

PriceSmart's dividend appears highly sustainable based on multiple coverage metrics. The company's payout ratio—the percentage of earnings distributed as dividends—stands at approximately 27% of trailing twelve-month earnings per share (EPS) of $5.07. This is well within conservative territory and below the commonly cited 50% threshold that signals ample reinvestment capacity. Free cash flow coverage is similarly robust. In fiscal year 2025, PriceSmart generated approximately $103 million in free cash flow against roughly $39 million in common dividend payments, implying a free cash flow payout ratio of approximately 38%. The company also maintains a notably strong balance sheet, carrying manageable debt levels while holding substantial cash reserves. With net income of roughly $148 million in fiscal 2025 and operating cash flow of $261 million, the dividend obligation is well-protected even in the event of moderate earnings fluctuations. The low payout ratio also provides optionality for continued dividend increases, share repurchases, and funding for PriceSmart's ongoing international warehouse club expansion.

Dividend Compared to Industry Peers

Within the discount retail and warehouse club segment, PriceSmart's 0.74% dividend yield occupies a middle ground. COST (Costco Wholesale) offers a yield of approximately 0.6%, while WMT (Walmart) yields around 0.9% to 1.1%. TGT (Target) stands out with a significantly higher yield near 4.5%, though with a materially higher payout ratio. Several other discount retail peers, including BJ (BJ's Wholesale Club) and DLTR (Dollar Tree), do not currently pay regular dividends. Where PriceSmart differentiates itself is in dividend growth velocity. Its three-year and five-year dividend growth rates in the low-to-mid teens surpass those of most larger competitors, including Walmart and Costco, making PSMT compelling for investors who prioritize growth of income over current yield. However, the company's dividend increase streak of four consecutive years is considerably shorter than Walmart's 50-plus-year track record of annual increases.

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Is This Stock Attractive for Dividend Investors?

PriceSmart may appeal primarily to dividend growth investors and long-term-oriented shareholders who prioritize the compounding effect of rising dividend payments over an extended holding period. With a double-digit dividend growth rate and a conservative payout ratio, the company is well-positioned to continue increasing its semi-annual distribution in the years ahead, provided its warehouse club operations in Latin America and the Caribbean maintain their expansion trajectory. The low current yield of under 1% makes the stock less suitable for income-focused investors who depend on dividends for near-term cash flow, particularly given that payments occur only twice a year rather than quarterly. The company's emerging-market exposure introduces currency and geopolitical risks that can affect earnings and, by extension, dividend growth. However, for patient investors with a multi-year horizon, PriceSmart's combination of a modest but growing dividend, a debt-light balance sheet, and a clearly articulated commitment to returning capital to shareholders offers a balanced profile within the discount retail space. As always, dividend decisions remain subject to board discretion and prevailing macroeconomic conditions.

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