TLDR
Costco declared a $30 per share special cash dividend, worth about $13.3 billion.
The payout is double the last special dividend of $15 in December 2023.
The board also reauthorized a $4 billion buyback running through November 2030.
Costco stock closed flat at $1,066 and rose 1.7% to $1,083.39 after hours.
Jefferies rates the stock Buy with a $1,100 price target.
Costco (COST) stock closed flat at $1,066 on Tuesday. After the bell, the retailer announced a special dividend, and the stock moved 1.7% higher to $1,083.39 in postmarket trading.
Costco Wholesale Corporation, COST
The board declared a special cash dividend of $30 per share. The total payout comes to about $13.3 billion.
Shareholders of record at the close of business on November 24 will get paid. The dividend is payable on December 4.
That is double the last special payout, which was $15 per share in December 2023. It is the first special dividend in almost three years.
Costco started paying special dividends in December 2012. That first one was $7 per share and cost about $3 billion.
Later payouts followed in February 2015 at $5 and May 2017 at $7. In November 2020, the board declared $10 per share.
A Look Back at the Payout History
The largest payout so far was the $6.7 billion dividend paid in January 2024. This new one is bigger, at roughly twice that total.
The company also reauthorized a stock repurchase program of up to $4 billion. It will expire in November 2030.
The new program replaces the current $4 billion plan. That plan was adopted in 2023 and was set to expire in January 2027.
Costco has already bought back $3.1 billion under the older program. About $900 million was left on it.
The news landed on a rough day for the broader market. Hotter-than-expected inflation data dragged stocks lower on Tuesday.
What Analysts and the Numbers Say
Jefferies analyst Corey Tarlowe rates Costco at Buy with a $1,100 price target. That target implies about 3% upside from Tuesday’s close.
“This dividend reinforces the quality and consistency underlying the Costco story,” Tarlowe wrote in a research note. He added that strong execution and durable cash generation help explain why investors keep coming to the stock.
Costco stock was up 24% for the year through Tuesday’s close. Strong same-store sales and hopes for a special payout helped drive the gain.
The company’s market cap stands at $472.5 billion. That puts it above Coca-Cola, Procter & Gamble and Home Depot.
The ETFs with the highest weighting of Costco include the Global X PureCap MSCI Consumer Staples ETF (GXPS). The Fidelity MSCI Consumer Staples Index ETF (FSTA) and the Vanguard Consumer Staples ETF (VDC) follow.
Costco stock was flat at $1,066 ahead of Wednesday’s opening bell. The postmarket move had it near $1,083.
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