Costco plans special cash dividend of $7 per share
Costco plans a special dividend of $7 per share next month in addition to the regular quarterly dividend the wholesale club operator pays shareholders.
The Issaquah, Wash., company said Wednesday that the special dividend will be payable Dec. 18 to shareholders of record Dec. 10. Costco Wholesale Corp.'s regular quarterly dividend of 27.5 cents per share will be paid Nov. 30 to shareholders of record as of Nov. 16.
Costco also said Wednesday that its November revenue climbed nearly 9 percent to $8.15 billion. Revenue from stores open at least a year rose 6 percent. The increase was 5 percent excluding gains from gasoline price inflation and stronger foreign currencies.
Revenue from stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Costco's shares rose $4.29, or 4.5 percent, to $100.80 in morning trading Wednesday. Its shares peaked for the past year at $104.43 in October. They traded as low as $78.81 in early January.
Many companies are making special end-of-year dividend payments or moving up their quarterly payouts because investors may have to pay higher taxes on dividend income starting in January.
Investors have paid a maximum 15 percent on dividends since 2003. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending.
As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
Even if a compromise is reached, there's no guarantee that the tax rate for dividends will remain at its current level.
Fitch Ratings said Wednesday it was lowering Costco's issuer default rating one notch to "A+" from "AA-" because the company plans to take on more debt to pay the special dividend. Analyst Philip M. Zahn said "A+" is still considered an above-average, investment-grade rating.
Costco runs 618 warehouses in several countries, including 447 in the United States and Puerto Rico.
The Issaquah, Wash., company said Wednesday that the special dividend will be payable Dec. 18 to shareholders of record Dec. 10. Costco Wholesale Corp.'s regular quarterly dividend of 27.5 cents per share will be paid Nov. 30 to shareholders of record as of Nov. 16.
Costco also said Wednesday that its November revenue climbed nearly 9 percent to $8.15 billion. Revenue from stores open at least a year rose 6 percent. The increase was 5 percent excluding gains from gasoline price inflation and stronger foreign currencies.
Revenue from stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
Costco's shares rose $4.29, or 4.5 percent, to $100.80 in morning trading Wednesday. Its shares peaked for the past year at $104.43 in October. They traded as low as $78.81 in early January.
Many companies are making special end-of-year dividend payments or moving up their quarterly payouts because investors may have to pay higher taxes on dividend income starting in January.
Investors have paid a maximum 15 percent on dividends since 2003. But that historically low rate will expire in January unless Congress and President Barack Obama reach a compromise on taxes and government spending.
As it stands, dividends will be taxed as ordinary income in 2013, the same as wages, so rates will go up depending on which income bracket a taxpayer is in. For the highest earners, the dividend rate would jump to 43.4 percent.
Even if a compromise is reached, there's no guarantee that the tax rate for dividends will remain at its current level.
Fitch Ratings said Wednesday it was lowering Costco's issuer default rating one notch to "A+" from "AA-" because the company plans to take on more debt to pay the special dividend. Analyst Philip M. Zahn said "A+" is still considered an above-average, investment-grade rating.
Costco runs 618 warehouses in several countries, including 447 in the United States and Puerto Rico.
I've been happy with my Costco stock and just got a little happier. I'm also seeing special dividends from other stock I own as everyone is unsure what will happen in January. I predict Costco will quickly have it's default rating raised in short order regardless of the additional debt. They've been very successful in their business.
Hmmm.. Who would have thought that you can still give big discounts AND pay your employees well WITH healthcare? I would happily pay a $50 per year to go to a company like Costco than support any Sam's Club or Wal-Mart store.Â
@fulcrum exactly!
Nice. I own a lot of Costco stock.