Costco to pay special $7 cash dividend to shareholders in pre-fiscal cliff returns
By Jay Keller
Costco announced on Wednesday a special $3 billion cash dividend on Costco common stock of $7.00 per share payable December 18, 2012, to shareholders. The special dividend payment to members is in addition to the company’s regular quarterly cash dividend of $0.275 per share that will be paid November 30.
Costco Wholesale Corporation (NASDAQ: COST) on Wednesday reported net sales of $8.15 billion for the month of November (through Nov. 25), a nine percent increase from the similar four-week period in 2011.
“Today’s announcement of a $7.00 special dividend, to be paid before the end of the calendar year, is our latest effort in returning capital to our shareholders while maintaining our conservative capital structure,” Richard Galanti, Executive Vice President and Chief Financial Officer, commented in a company news release. “Our strong balance sheet and favorable access to the credit markets allow us to provide shareholders with this dividend while also preserving financial and operational flexibility to grow our business globally.”
Galanti concluded by saying that Costco’s value proposition to the more than 67 million Costco cardholders throughout the world allows for ongoing dividend and share repurchase activities.
Investors considering Costco stock, according to a premium analysis from The Motley Fool, should pay close to two key areas when making that decision: Membership mix and international growth.
“The proportion of Executive members to basic members, particularly in North America, will be a telling indicator of whether Costco is able to convince its members to pay more for its value proposition” according to the special report.
International growth is important for investors primarily because global markets represent huge potential for market-share growth. What’s more is that since Costco’s international stores have a significantly lower renewal rates than U.S. and Canadian stores, future growth for the company is linked to membership growth in global markets, particularly in East Asia.
Comparable sales, or sales from warehouses in operation for at least one year, rose six percent in the month of November, with growth of six percent in the U.S. and seven percent in the international business.
Additional discussion of these sales results is available in a pre-recorded telephone message. The recording can be accessed by dialing 1-855-859-2056 (conference ID 28780249). This message will be available today through 5:00 p.m. (PT) on Friday, November 30, 2012.