Key Points
Costco reports its fiscal fourth-quarter results on Thursday of next week.
It has declared special dividends every two or three years. The last distribution happened in late 2023.
The last declaration was for $15 a share. The next one should be even larger.
Investors are hoping to cash in on Costco (NASDAQ: COST) -- in more ways than one -- when it reports its fiscal fourth-quarter results next week. The leading warehouse club operator already reported strong sales for the 16 weeks of the fiscal period that ended late last month.
Net sales rose 11.3% to $93.9 billion, fueled largely by a robust 10.7% jump in comps for its stateside stores. The real mystery will be how the chain delivered on the bottom line, but there's also a bigger reason to tune in next week: History suggests Costco will shell out a record special dividend later this year. It could tip its hand during next week's earnings call.
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Making investors feel special
Costco has delivered 22 straight years of dividend hikes, but the 0.7% yield won't wow most income investors. Don't blame Costco. The retailer has done so well that Costco's stock appreciation has outpaced its quarterly distributions.
The real payoff treat here has been the special distributions that Costco has declared along the way.
- Dec. 27, 2023: $15 a share
- Dec. 1, 2020: $10
- May 8, 2017: $7
- Feb. 5, 2015: $5
- Dec. 6, 2012: $7
Notice how these beefy disbursements have happened every two or three years? We're at three years now. It would be surprising if Costco doesn't declare a substantial one-time dividend before the end of this year.
It won't likely be announced during next week's financial update. The last two December payouts were declared in November and December. However, any language during the Sept. 24 earnings call suggesting the cash that it's been stockpiling since 2023 is growing will be a dead giveaway.
Rick Munarriz has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.