Costco (COST -0.55%) has announced today it is rewarding investors with a special dividend worth $10 per share. The payment will be the fourth time in the last eight years that the company has paid a special dividend.
Costco previously announced its regular quarterly cash dividend of $0.70 per share on Oct. 14. The special $10 dividend represents a 2.6% return on Monday's closing share price of $379.79.
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The payment will cost the company about $4.4 billion, and will be paid using existing cash. "Our strong balance sheet allows us to pay this dividend, while preserving financial and operational flexibility to continue to grow our business globally," CFO Richard Galanti said.
The company recently reported its October net sales increased 15.9% versus the prior-year period. As with other retailers during the pandemic, Costco has experienced strong e-commerce sales growth. It said comparable online sales grew more than 91% for the month of October. This continued a surge that began during the pandemic. For its full fiscal year, which ended Aug. 30, e-commerce sales grew 50% year over year.
Shareholders have been similarly rewarded with a 32% gain in the stock price since the start of 2020. Costco reported 105.5 million membership cardholders as of Aug. 30. That's an increase of more than 7% from fiscal year 2019. Sales have grown by 9.3% in that time, helped by pandemic-related trends. Galanti commented that the company remains in a position to continue to create long-term shareholder value after the special payout.
