Investors have been anticipating another special dividend from Costco for a while. Costco gave a special dividend in 2013, 2015 and 2017, so investors are anxiously awaiting one just like a kid waits for Santa Claus.
The attached article says it isn't likely to happen since it will cost Costco $10 billion.
What?! As Lee Corso often says in the college football game day program, “Not so fast!”
The last special dividend of $7.00 was paid in 2017. It required $3.1 B and the basic shares outstanding haven't changed much. So with 438,859 basic shares outstanding at the end of last quarter (3rd), the cost would be around 3.079 B(439,859 times $7/shr). That is a far cry from $10 Billion.
If Costco were paying a $10 Billion special dividend payout, it would amount to $22.73/Shr (10 B divided by 439,859). Anyone expecting $22.73, must be expecting the tooth fairy to visit soon too!
The bottom line is that Costco has the ability to pay a special dividend. Will they pay it? We can’t be sure unless we are the CEO, CFO or the board, but history indicates a clear pattern of paying special dividends.
I don’t know where someone came up with the $10 Billion dollar number. It was clearly pulled out of thin air. A simple review of Costco’s 10K’s and 10Q’s shows this clearly. This information is in the CostcoDividendInformation.pdf below.
Stay tuned!
