Costco Wholesale Corporation raised its quarterly cash dividend by 12.9% to $0.79 per share. The big-box store company previously increased the dividend by 7.7% to $0.70 per share in April 2020.
Costco (COST) announced that the new dividend will be paid on May 14 to shareholders of record as of April 30.
The company’s annual dividend of $3.16 per share now reflects a dividend yield of 0.87%.
Last month, Costco reported fiscal 2Q results. Including certain one-time items, the company’s 2Q earnings inched up 1.9% year-over-year to $2.14 per share but missed Street estimates of $2.44. Net sales increased 14.7% to $43.9 billion and exceeded analysts’ expectations of $43.78 billion. (See Costco stock analysis on TipRanks)
On April 7, Oppenheimer analyst Rupesh Parikh increased the stock’s price target to $400 (9% upside potential) from $370 and maintained a Buy rating.
Parikh said, “We are lifting our forecasts to reflect today’s March sales results and our latest thinking.”
Furthermore, “COST remains a top pick for us, but we still believe investors should take advantage of weakness vs. chasing strength as a volatile trade likely continues amidst upcoming difficult comparisons,” the analyst added.
The consensus rating among analysts is a Strong Buy based on 14 Buys versus 4 Holds. The average analyst price target stands at $386.50 and implies upside potential of 5.3% to current levels. Shares have gained almost 18% over the past year.
Costco scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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