Costco (NASDAQ:COST) announced a 13.3% hike in its quarterly cash dividend. The retailer that operates through membership warehouses and an e-commerce platform consistently returns more cash to its shareholders through higher dividend payments and share repurchases.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The new quarterly dividend of $1.02 per share translates into a forward yield of 0.82% based on yesterday’s closing price of $496.03.
Thanks to its solid comparable sales, Costco generates strong earnings, which support its dividend payouts. In 2022, COST increased its quarterly dividend to $0.90 per share from $0.79. Impressively, it also paid a special dividend of $10 per share in 2021.
Like most of its peers, Costco is also witnessing a slowdown in its sales growth amid pressure on non-food sales. However, its value pricing strategy and loyal customer base position it well to perform well amid all market conditions.
Highlighting the company’s value proposition, William Blair analyst Phillip Blee started the coverage of Costco with a Buy recommendation yesterday. Blee expects the retailer’s value offerings and “highly engaged and loyal member base” to add stability to its financials.
Is Costco Stock a Buy, Sell, or Hold?
Including Blee, 19 analysts have recommended a Buy on COST stock. Meanwhile, it has received seven Hold recommendations. Overall, Costco sports a Moderate Buy consensus rating as macro concerns keep analysts cautiously optimistic.
Analysts’ average price target of $550.33 implies 10.95% upside potential from current levels.
