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Costco (COST) Raises Dividend: What Else You Should Know
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Costco Wholesale Corporation (COST - Free Report) has always been a favorite pick for investors who are seeking both steady income and growth. This Issaquah, WA-based company with a strong history of dividend payments as well as sound fundamentals provides a hedge against any odd swings in the stock market. Evidently, COST’s strong cash flow generation capability has allowed it to raise dividend consistently over time.
This operator of membership warehouses once again rewarded investors with a hike in dividend payout. Costco’s board of directors raised the quarterly dividend 13.9% to 90 cents a share, payable May 13, 2022, to its shareholders of record at the close of business on Apr 29, 2022. Last April, Costco hiked its regular quarterly dividend 12.9% to 79 cents.
Backed by sound fundamentals and financial strength, Costco has time and again highlighted its commitment to enhancing its shareholder value. The current hike reflects a strong cash flow generation capability, driven by better execution of operating plans. We note that net cash provided by operating activities totaled $3,659 million in the first half of fiscal 2022 compared with $2,685 million in the first half of fiscal 2021.
We believe that such strategic steps not only drive the shareholder value but also raise the market value of the stock. In fact, through these dividend increases companies persuade investors to either buy or hold the scrip. People looking for regular income from stocks are most likely to choose companies with a track record of consistent and incremental dividend payouts.
Image Source: Zacks Investment Research
What Else You Should Know
Costco’s growth strategies, better price management, decent membership trends and an increasing penetration of e-commerce business have been contributing to its upbeat performance for a while. The strategy to sell products at discounted prices helped draw customers who have been seeking both value and convenience so far. Cumulatively, these factors continue aiding in registering impressive sales numbers.
Costco’s net sales increased 18.7% to $21.61 billion for the retail month of March, the five-week period ended Apr 3, 2022, from $18.21 billion recorded last year. This followed an increase of 15.9% in February and 15.5% in January. Comparable sales for the retail month of March jumped 17.2%. This followed increases of 14% and 14.2% in February and January, respectively.
Costco continues to be one of the dominant warehouse retailers based on the expanse and quality of merchandise offered. It is focused on ramping up investments in the wake of rising competition. We believe that COST’s business model as well as its commitment toward opening membership warehouses, and providing convenient and affordable ways to shop, will continue to drive traffic and in turn, revenues.
Costco currently operates 829 warehouses, comprising 573 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.
Kroger, the renowned grocery retailer, carries a Zacks Rank of 2 at present. The company has an expected EPS growth rate of 9.9% for three-five years.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 2.4% and 0.8%, respectively, from the corresponding year-ago reported numbers. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
General merchandise retailer Target currently carries a Zacks Rank #2. TGT has an expected EPS growth rate of 16.5% for three-five years.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the corresponding year-ago period’s levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.
Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank of 2 at present. TSCO has an expected EPS growth rate of 9.8% for three-five years.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and EPS suggests growth of 8.1% and 8.9%, respectively, from the corresponding year-ago period’s actuals. TSCO has a trailing four-quarter earnings surprise of 22%, on average.
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Costco (COST) Raises Dividend: What Else You Should Know
Costco Wholesale Corporation (COST - Free Report) has always been a favorite pick for investors who are seeking both steady income and growth. This Issaquah, WA-based company with a strong history of dividend payments as well as sound fundamentals provides a hedge against any odd swings in the stock market. Evidently, COST’s strong cash flow generation capability has allowed it to raise dividend consistently over time.
This operator of membership warehouses once again rewarded investors with a hike in dividend payout. Costco’s board of directors raised the quarterly dividend 13.9% to 90 cents a share, payable May 13, 2022, to its shareholders of record at the close of business on Apr 29, 2022. Last April, Costco hiked its regular quarterly dividend 12.9% to 79 cents.
Backed by sound fundamentals and financial strength, Costco has time and again highlighted its commitment to enhancing its shareholder value. The current hike reflects a strong cash flow generation capability, driven by better execution of operating plans. We note that net cash provided by operating activities totaled $3,659 million in the first half of fiscal 2022 compared with $2,685 million in the first half of fiscal 2021.
We believe that such strategic steps not only drive the shareholder value but also raise the market value of the stock. In fact, through these dividend increases companies persuade investors to either buy or hold the scrip. People looking for regular income from stocks are most likely to choose companies with a track record of consistent and incremental dividend payouts.
Image Source: Zacks Investment Research
What Else You Should Know
Costco’s growth strategies, better price management, decent membership trends and an increasing penetration of e-commerce business have been contributing to its upbeat performance for a while. The strategy to sell products at discounted prices helped draw customers who have been seeking both value and convenience so far. Cumulatively, these factors continue aiding in registering impressive sales numbers.
Costco’s net sales increased 18.7% to $21.61 billion for the retail month of March, the five-week period ended Apr 3, 2022, from $18.21 billion recorded last year. This followed an increase of 15.9% in February and 15.5% in January. Comparable sales for the retail month of March jumped 17.2%. This followed increases of 14% and 14.2% in February and January, respectively.
Costco continues to be one of the dominant warehouse retailers based on the expanse and quality of merchandise offered. It is focused on ramping up investments in the wake of rising competition. We believe that COST’s business model as well as its commitment toward opening membership warehouses, and providing convenient and affordable ways to shop, will continue to drive traffic and in turn, revenues.
Costco currently operates 829 warehouses, comprising 573 in the United States and Puerto Rico, 105 in Canada, 40 in Mexico, 30 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China, and one in Iceland.
Impressively, Costco has outpaced both the Retail - Discount Stores industry and the Retail-Wholesale sector in the past year. We note that shares of this Zacks Rank #2 (Buy) player have appreciated 60.2% in the past year compared with the industry’s growth of 20%. Meanwhile, the sector has declined 21.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3 More Stocks Looking Red Hot
Here we highlight three other top-ranked stocks, namely, Kroger (KR - Free Report) , Target (TGT - Free Report) and Tractor Supply Company (TSCO - Free Report) .
Kroger, the renowned grocery retailer, carries a Zacks Rank of 2 at present. The company has an expected EPS growth rate of 9.9% for three-five years.
The Zacks Consensus Estimate for Kroger’s current financial-year sales and EPS suggests growth of 2.4% and 0.8%, respectively, from the corresponding year-ago reported numbers. KR has a trailing four-quarter earnings surprise of 22.1%, on average.
General merchandise retailer Target currently carries a Zacks Rank #2. TGT has an expected EPS growth rate of 16.5% for three-five years.
The Zacks Consensus Estimate for Target’s current financial-year sales and EPS suggests growth of 3.5% and 6.7%, respectively, from the corresponding year-ago period’s levels. TGT has a trailing four-quarter earnings surprise of 21.3%, on average.
Tractor Supply Company, a rural lifestyle retailer in the United States, carries a Zacks Rank of 2 at present. TSCO has an expected EPS growth rate of 9.8% for three-five years.
The Zacks Consensus Estimate for Tractor Supply Company’s current financial-year sales and EPS suggests growth of 8.1% and 8.9%, respectively, from the corresponding year-ago period’s actuals. TSCO has a trailing four-quarter earnings surprise of 22%, on average.