Two dividend stocks are looking particularly attractive in October. Both stocks are trading well below their all-time highs set earlier this year, yet their recent fundamental performance suggests these market leaders are poised for meaningful growth -- both in their underlying businesses and their dividends.

These two stocks are Costco (NASDAQ:COST) and Apple (NASDAQ:AAPL). At the time of this writing, Costco and Apple are trading about 9% and 7% below their all-time highs. Their lower stock prices are giving income investors an opportunity to buy quality companies with growing dividends.

A roll of 100 dollar bills with a sign reading, "dividends."

Image source: Getty Images.

Costco

Company

Dividend Yield

Payout Ratio

3-Year Annual Dividend Growth

Costco

1.2%

32%

13%

Data source: Yahoo! Finance and Morningstar. Table by author.

The first thing investors interested in Costo as a dividend stock should realize is that the stock's 1.2% dividend yield significantly understates the company's dividend payments over the long-term. This is because Costco occasionally pays out a fat special dividend on top of its regular quarterly dividends.

For instance, Costco's dividend yield is 1.2% based on its quarterly dividend of $0.50 ($2 on an annual basis), but its trailing-12-month dividend yield is 4.8% when including the $7 special dividend it paid out in May. 

The catch, of course, is that Costco doesn't pay out a special dividend every year. In addition, these special dividends can vary in their amounts. This is why they are called "special dividends." Costco's last three special dividends were paid out in 2017, 2015, and 2012 in amounts of $7, $5, and $7, respectively.

Still, Costco's regular dividend is notable on its own. The regular dividend amounts to just 32% of earnings and increased each year for 14 years straight. Further, the dividend has increased at a nice annualized rate of 13% over the past three years.

Finally, Costco's underlying business is also growing nicely, evidenced by its strong comparable sales recently. Comparable sales were up 7.3% year over year in August.

Apple

Company

Dividend Yield

Payout Ratio

3-Year Annual Dividend Growth

Apple

1.6%

27%

10%

Data source: Yahoo! Finance and Morningstar. Table by author.

Since Apple doesn't pay a special dividend like Costco, the tech giant's 1.6% dividend yield is a direct reflection of dividend payments on a per-share basis. So, Apple's 1.6% dividend yield certainly isn't mouthwatering. Indeed, it's lower than the average 2% dividend yield of stocks in the S&P 500. But a 1.6% dividend yield from Apple is a good entry point. The yield was as low as 1.46% before the stock's pullback during September.

AAPL Chart

AAPL data by YCharts

While this 1.6% yield may be lower than what income investors can find elsewhere, Apple's dividend has enticing growth prospects. Not only does the dividend's 10% compound annual growth over the past three years highlight a strong growth trend, but Apple is currently only paying out 27% of its earnings in dividends. Further, Apple is growing its earnings per share rapidly recently -- up 17% year over year in the company's most recent quarter. And Apple's upcoming iPhone X launch should help Apple achieve more strong EPS growth in the company's fiscal 2018.

These are both solid dividend stocks -- and now is the time to buy them.

Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.