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(NASDAQ: COST) One More Reason to Own the Costco Stock

Costco Wholesale just increased its dividend, which is yet more reason to invest in the company.

Costco (NASDAQ: COST) stated after the market closed on Wednesday that it had approved a quarterly distribution of 90 cents per share, or $3.60 per year, up from 79 cents per quarter, or $3.16 per year. The dividend will be paid on May 13 to shareholders who were on the books on April 29 at the close of business.

Costco’s dividend is almost an afterthought for many people. The stock will yield just 0.6 percent yearly at a closing price of $591.09, a pittance when compared to, instance, AT&T’s 5.7 percent yield. Costco stock was trading at $591.09 in after-hours trading Wednesday evening, indicating that the stock market had shrugged.

Costco Special Dividends

Costco began paying dividends in May of 2004 and has continued to do so ever since. However, income investors aren’t just interested in the usual payment at Costco. The corporation has a history of paying out “special dividends,” which are large distributions that occur every few years. The most recent was a $10-per-share dividend announced in November 2020; the previous one was announced in 2017.

Costco investors, on the other hand, are primarily interested in the stable returns. Over the last three years, the stock has returned 35%, 29% over the last five years, 22% over the last ten years, and 17% over the last fifteen years. Over all of those time periods, those returns have significantly outperformed the S&P 500.