We knew it was coming. We just didn't know when.

Costco (COST 1.01%) Chief Financial Officer Richard Galanti's rhetoric in recent earnings calls, when asked about whether the company would pay out another special dividend, has been that it's "probably a question of when, not if." The day has finally come.

Costco announced on Thursday it would pay a special cash dividend of $15 per share on Jan. 12, 2024 to shareholders of record as of the close of business on Dec. 28. This, of course, is on top of the quarterly dividend the company has already committed to.

The news of Costco's special dividend builds on an upbeat quarterly financial update released on Thursday. The report, which featured double-digit year-over-year earnings-per-share growth, highlighted the membership-based wholesale warehouse's resilience, even in a challenging macroeconomic environment.

Costco's dividend history

This will be Costco's fifth-ever special dividend. Previous special dividends were paid in 2012, 2015, 2017, and 2020 in the amounts of $7, $5, $7, and $10, respectively. This makes the company's 2024 special dividend of $15 its largest, by far.

To fund this dividend, Costco will pay an aggregate amount of $6.7 billion to shareholders.

Unlike many of its peers, Costco operates its business with a significant net cash position. This means its interest expense is extremely low, which helps the company keep its cost structure low to pass those savings onto members. At the end of its just-reported fiscal first quarter, Costco had about $7 billion of debt and nearly $18 billion of cash, cash equivalents, and short-term investments. So there's plenty of cash to spare.

Costco also notably pays a meaningful, growing quarterly dividend of $1.02. The company's most recent hike came in at a double-digit rate of 12%.

Support for a high stock price

A robust special dividend comes at a good time for shareholders. The stock has soared nearly 40% year to date, giving the stock a somewhat pricey valuation. The stock's price-to-earnings ratio is now in the forties. Fortunately, a special dividend and double-digit growth in earnings per share help support this high valuation.

Speaking of Costco's earnings, the company's fiscal first-quarter revenue and earnings per share both came in higher than analysts' estimates. Total revenue of $57.8 billion was up from $54.4 billion in the year-ago quarter, beating analysts' average forecast for revenue of $57.7 billion. Earnings per share of $3.58 (up 17% year over year) was also higher than a consensus estimate of $3.42.

Sales in the quarter were helped by growing demand for the company's groceries and essentials. But strong growth in membership fees also helped. Membership fee revenue rose more than 8%, outpacing net sales growth by 2 percentage points.

Altogether, Costco's results offer a strong reminder of why the company's shares are worth a high premium. This is especially true ahead of a likely membership fee increase in the near future.

Just as management has hinted at a special dividend, it's also hinted that a membership fee increase is up for consideration. Indeed, it wouldn't be surprising to see Costco raise the prices of its memberships in 2024.