For many years, Costco Wholesale Corporation (COST 0.94%) stock has been a steady winner, and 2015 was no different. Thanks to a surge over the past few months, the warehouse retailer was set to finish the year with a 15% gain, beating the S&P 500, which was essentially flat.
Let's take a look at some of the headlines that drove Costco shares higher over the past year.
Costco announces special cash dividend of $5.00 per share (1/30/15)
As the retailer has done before, Costco announced a special dividend of $5.00 per share, returning $2.2 billion to shareholders. While the company's regular dividend only offers a yield of 1%, these special payouts create significantly more value for shareholders. The retailer's previous special dividend at the end of 2012 paid $7 a share, or a total payout of $3 billion.
Costco to ditch AmEx cards at U.S. stores in 2016 (2/12/15)
In the wake of the Costco-American Express (AXP 1.75%) divorce, the market focused on AmEx, sending its shares plummeting. Costco shares were unchanged on the news, but the decision should be a victory over the long run. Prior to the arrangement, Costco had only accepted AmEx credit cards, creating an inconvenience for its customers as AmEx cards are not as popular as Visa or MasterCard.
Costco signs deal with Citi (3/3/15)
A few weeks following its separation from American Express, Costco signed a deal with Citigroup (C 0.70%). Citi will become the exclusive issuer of Costco credit cards under the Visa network, a change that will go into effect on April 1, 2016. That shift should open the card to more potential users, and Costco seems to have scored another coup as it will pay a near-zero processing rate, less than the 0.6% it currently pays with American Express.
Costco reauthorizes stock repurchase program, increases quarterly cash dividend (4/17/15)
Returning cash to shareholders is always good news for investors, and Costco did not disappoint in 2015. It reauthorized a $4 billion buyback program to expire in April 2019 and lifted its dividend payout 13% from $0.355 per share per quarter to $0.40. Costco has raised its dividend 10 years in a row since first implementing the payout in 2004, generally lifting it between 10% and 15%. At its current rate of growth, investors can expect such dividend hikes to continue.
Craig Jelinek named CEO of the Year (12/23/15)
A feather in its cap for the end of the year, Costco CEO Craig Jelinek was named CEO of the year by CNN Money. The news site credited his bold decision to drop AmEx and increase the company's position in organic groceries as it takes market share from bigger players. Though Costco was far from the best stock to own this year, its steady growth over the years earned it the nod from CNN.
Costco commits to a cage-free egg supply (12/28/15)
Costco normally avoids political pressure by paying its workers a high wage and staying away from other controversies, but it faced concerns over its egg supply this summer. Responding to pressure from numerous celebrities and an investigation that found that some of its chickens were living in inhumane conditions, Costco announced just this week that it would ensure a 100% cage-free egg supply, saying, "We are working with our suppliers toward a complete and sustainable transition to a cage‐free supply chain." Costco did not provide a date to complete the transition and was careful to say it would take time. Still, it makes the company the first mainstream grocer to commit to cage-free eggs, and is yet another reason for consumers to feel good about shopping there.