Published Mon, 14 Oct 2019 09:44:49 -0400 on Seeking Alpha
To be sure, investors in Costco probably aren’t buying the shares for the yield at present. With the shares up more than 40% this year, shareholders probably think of the dividend as icing on the cake. In the last two years, the only thing that has put a hiccup in Costco’s climb have been corrections in the market. The shares aren’t exactly cheap, and on the surface the stock’s valuation could be a roadblock for some. That being said, Costco has a much higher hidden yield waiting to be revealed. Looking at the company’s history, investors should expect a yield for 2020 of 5%.
One reason Costco investors should have confidence that more is coming from the company, is its dominance over the domestic market. Costco has been the model of consistency when it comes to same-store sales. Comparing Costco and Walmart’s (NYSE: WMT) Sam’s Club business shows significantly better performance from the former.
In the most recent quarter, Costco’s domestic comparable store sales grew by 5.2% year over year. The company’s CFO Richard Galanti said, “Traffic or shopping frequency increased 3.7% worldwide and 3.6% in the U.S.” Where Sam’s Club is concerned, same-store sales increased by 1.8%, but hidden underneath this number, transactions increased by 5%, yet the average ticket declined by 3.8%.
(Source: 9 Surprising Ways to Save at Costco)
If we look at a revenue per store, Costco’s business looks even better. In the last... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
Older articles featuring Wal-mart Stores (WMT):Walgreens Boots: Dividend All-Star Transforming Too Slow
Dividend Increases: February 15-21, 2020 (Part 1)
Dividend Champion And Contender Highlights: Week Of February 23
Walmart Raises Annual Dividend to $2.16 Per Share, Marking 47th Consecutive Year of Dividend Increases
Retailers Ross Stores, TJX Companies, Walmart Among 14 Companies To Increase Dividends In The Second Half Of February
Dividend Champions Analysis: Canadian National Railway Is The Newest Champion
The 2020 Fortune World's Most Admired Companies: 42 Pay Dividends
How To Protect Your Dividend Growth Portfolio From The Pending Market Crash
Expected Dividend Increases In February 2020
High 5 For The Dividend Growth 50: Income Up 8.9% - Part 2