Investing in Costco Wholesale (COST)
If you invest $10,000 in Costco Wholesale shares at a price of around $902, you could purchase about 11 shares. With a dividend yield of 0.65%, your investment would generate approximately $65 in annual passive income.
The Bigger Picture
Don’t be discouraged by the seemingly low yield; Costco isn’t just a consistent dividend payer—it’s a strong dividend grower. In April, Costco announced a 13% increase in its dividend, and the company has a history of significantly increasing its payouts:
| Paid In | Quarterly Dividend per Share |
|---|---|
| August 2026 | $1.47 |
| August 2025 | $1.30 |
| August 2024 | $1.16 |
| August 2023 | $1.02 |
| August 2022 | $0.90 |
Since 2020, the dividend payout has more than doubled, suggesting that your income could rise to $130 or more in the coming years.
Special Dividends
Costco occasionally issues “special dividends” which can be substantial. For example:
| Paid In | Special Dividend per Share |
|---|---|
| January 2024 | $15.00 |
| December 2020 | $10.00 |
If the next special dividend is $15 and you own 11 shares, that would equate to an additional $165 in your pocket.
Should You Invest?
As a current shareholder, I see value in Costco, but it’s essential to consider valuation. Currently, the stock appears overvalued with a price-to-sales ratio of 1.37 and a P/E ratio of 45. While long-term holding may be beneficial, it’s prudent to wait for a price dip to minimize risk.
Conclusion
Costco offers not just dividends but also strong growth potential, making it worth considering—while remaining mindful of current valuations.
