Costco Hiked Its Dividend by 13%. Here Is What a $10,000 Investment Earns Annually.
Selena Maranjian, The Motley Fool
Mon, September 14, 2026 at 2:42 PM GMT+3 4 min read
If you plunk $10,000 into shares of Costco Wholesale (NASDAQ: COST), how much passive dividend income will that generate? A cursory look at Costco would suggest its recent dividend yield of 0.65% is puny, generating just about $65 in annual income from your $10,000. (With a recent stock price of $902, you'd be buying about 11 shares.)
Don't let that be a dealbreaker, though, because there's more than meets the eye here, and Costco is definitely a dividend income generator worth your consideration.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Meet Costco
Costco needs little introduction, but here are a few facts about it: Launched in 1976 as Price Club, it originally sold goods to small businesses. But it broadened its scope in 1983 with its first Costco warehouse in Seattle and became the first company ever to grow from $0 to $3 billion in sales in less than six years.
It now boasts 939 warehouse stores, 647 of which are in the U.S., with others in Europe, Canada, Mexico, Japan, and beyond. Costco is known for being good not just to shareholders (its stock has averaged annual gains of 20% over the past decade) but also to its employees and customers.
Costco's surprising dividend story
A key thing to understand about Costco is that it's not only a dividend payer but also very much a dividend grower. Its most recent hike, announced in April, was a 13% increase.
Check out some of its quarterly payments in recent years:
Source: Costco.
Since 2020, Costco's payout has more than doubled. So while getting $65 today may be disappointing, it could be $130 or $150 within a few years.
But the Costco dividend situation is much better than that -- because the company occasionally issues "special dividends" -- which tend to be kind of ... huge. Check it out:
Source: Costco.
We don't know when the next special dividend will be distributed, but if it remains at $15.00 per share, your 11 shares will generate $165. If it's bumped to, say, $20, the shares will generate $220. And more in the years to come. Remember too that those special dividends aren't used in calculating the dividend yield (which is calculated using the trailing 12 months of dividend payments only). So Costco's low yield is accurate by accounting standards, but inaccurate as to how well Costco stock pays for ownership.
Should you invest in Costco?
I myself am a shareholder, and I recommend the stock to others as well -- with one caveat: Don't buy into it with no regard to valuation. Right now, for example, the shares seem a bit overvalued, with a recent price-to-sales ratio of 1.37, above the five-year average of 1.24. The price-to-earnings (P/E) ratio, recently at 45, is roughly on par with the five-year average, but it's a bit steep compared to your average stock. You will probably do all right if you plan to hold the shares for many years, if not decades, but to play it safer, you might wait and hope for a price dip.
Should you buy stock in Costco Wholesale right now?
Before you buy stock in Costco Wholesale, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Costco Wholesale wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $417,413!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,341,294!*
Now, it's worth noting Stock Advisor's total average return is 950% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 14, 2026.
Selena Maranjian has positions in Costco Wholesale. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
Costco Hiked Its Dividend by 13%. Here Is What a $10,000 Investment Earns Annually. was originally published by The Motley Fool
Yorumlar (0)
Giriş yaparak yorum yazabilirsin.
İlk yorumu sen yaz.