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Costco Hikes Dividend: 3 More Things That May Arouse Interest
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Costco Wholesale Corporation (COST - Free Report) , a membership warehouse retailer, gave investors a reason to cheer by boosting its dividend payout. The hike in dividend accentuates this Issaquah, WA-based company’s financial stability and resilience toward the tough retail landscape.
The Board of Directors raised the quarterly dividend by 14% to 57 cents a share to be paid on May 25, 2018. The dividend yield based on the new payout and the last closing market price is approximately 1.18%. Last year in April, Costco increased regular quarterly dividend by 11% to 50 cents and also declared a special cash dividend of $7.00 per share.
We believe that such hikes not only enhance shareholders’ value but raise the market value of the stock as well. In fact, through these dividend increases companies persuade investors to either buy or hold the scrip instead of selling it. People looking for regular income from stocks are most likely to choose companies that have a track record of consistent and incremental dividend payouts.
3 Other Things That May Raise Interest
Stock Ascends 19% in Six Months
Costco, which came under pressure after the news of Whole Foods’ buyout by Amazon (AMZN - Free Report) surfaced, has emerged stronger since then. The company’s growth strategies and sound fundamentals reinforce its position.
Notably, shares of this Zacks Rank #3 (Hold) company have advanced 18.5% in the past six months compared with the industry’s growth of 15.9%. The stock has also comfortably outperformed the Retail-Wholesale and the S&P 500 index that advanced 11.2% and 3.1%, respectively. Further, the stock is hovering close to its 52-week high of $199.88.
We see no reason why Costco with a VGM Score of A and long term earnings growth rate of 10.5% could not breach that mark in the near term.
Sturdy Comps Performance Continues
Improving labor market, rising disposable income and elevated consumer sentiment have ushered confidence in Costco that continued with its stellar comparable sales (comps) performance in 2018. Comps rose 8.6% in March, following an increase of 10.5% in February and 6% in January. Last year, comps had gained 11.5% in December, 10.8% in November and 7.5% in October.
The company generated net sales of $12.92 billion in the month of March, up 10.9% year over year. Notably, net sales have jumped 12.8% and 8.4% in the months of February and January, respectively. The metric has displayed an increase of 14.3%, 13.2% and 10.1% in December, November and October, respectively.
Top & Bottom Lines Continue to Improve
The company continues to be one of the dominant retail wholesalers. The strategy to sell products at discounted prices has helped it to remain on growth track. It is also steadily expanding e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea and Taiwan. As a result, comparable e-commerce sales have surged 33.2%, 38.1% and 34.8% in March, February and January, respectively.
Additionally, a differentiated product range enables Costco to provide an upscale shopping experience for its members. Notably, membership fees have increased 12.6% and 9.8% in the second and first quarter of fiscal 2018, respectively. Meanwhile, total revenue grew 10.8% and 13.2% during the second and first quarter, respectively. Earnings per share improved 21.4% and 16.2% in the respective quarters.
Certainly, Costco’s sound fundamentals place the stock favorably in 2018.
2 Key Picks in the Retail Space
Dollar General (DG - Free Report) delivered an average positive earnings surprise of 2.3% in the trailing four quarters. It has a long-term earnings growth rate of 14.6% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Burlington Stores (BURL - Free Report) delivered an average positive earnings surprise of 15% in the trailing four quarters. It has a long-term earnings growth rate of 18.6% and a Zacks Rank #2 (Buy).
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Image: Bigstock
Costco Hikes Dividend: 3 More Things That May Arouse Interest
Costco Wholesale Corporation (COST - Free Report) , a membership warehouse retailer, gave investors a reason to cheer by boosting its dividend payout. The hike in dividend accentuates this Issaquah, WA-based company’s financial stability and resilience toward the tough retail landscape.
The Board of Directors raised the quarterly dividend by 14% to 57 cents a share to be paid on May 25, 2018. The dividend yield based on the new payout and the last closing market price is approximately 1.18%. Last year in April, Costco increased regular quarterly dividend by 11% to 50 cents and also declared a special cash dividend of $7.00 per share.
We believe that such hikes not only enhance shareholders’ value but raise the market value of the stock as well. In fact, through these dividend increases companies persuade investors to either buy or hold the scrip instead of selling it. People looking for regular income from stocks are most likely to choose companies that have a track record of consistent and incremental dividend payouts.
3 Other Things That May Raise Interest
Stock Ascends 19% in Six Months
Costco, which came under pressure after the news of Whole Foods’ buyout by Amazon (AMZN - Free Report) surfaced, has emerged stronger since then. The company’s growth strategies and sound fundamentals reinforce its position.
Notably, shares of this Zacks Rank #3 (Hold) company have advanced 18.5% in the past six months compared with the industry’s growth of 15.9%. The stock has also comfortably outperformed the Retail-Wholesale and the S&P 500 index that advanced 11.2% and 3.1%, respectively. Further, the stock is hovering close to its 52-week high of $199.88.
We see no reason why Costco with a VGM Score of A and long term earnings growth rate of 10.5% could not breach that mark in the near term.
Sturdy Comps Performance Continues
Improving labor market, rising disposable income and elevated consumer sentiment have ushered confidence in Costco that continued with its stellar comparable sales (comps) performance in 2018. Comps rose 8.6% in March, following an increase of 10.5% in February and 6% in January. Last year, comps had gained 11.5% in December, 10.8% in November and 7.5% in October.
The company generated net sales of $12.92 billion in the month of March, up 10.9% year over year. Notably, net sales have jumped 12.8% and 8.4% in the months of February and January, respectively. The metric has displayed an increase of 14.3%, 13.2% and 10.1% in December, November and October, respectively.
Top & Bottom Lines Continue to Improve
The company continues to be one of the dominant retail wholesalers. The strategy to sell products at discounted prices has helped it to remain on growth track. It is also steadily expanding e-commerce capabilities in the United States, Canada, the U.K., Mexico, Korea and Taiwan. As a result, comparable e-commerce sales have surged 33.2%, 38.1% and 34.8% in March, February and January, respectively.
Additionally, a differentiated product range enables Costco to provide an upscale shopping experience for its members. Notably, membership fees have increased 12.6% and 9.8% in the second and first quarter of fiscal 2018, respectively. Meanwhile, total revenue grew 10.8% and 13.2% during the second and first quarter, respectively. Earnings per share improved 21.4% and 16.2% in the respective quarters.
Certainly, Costco’s sound fundamentals place the stock favorably in 2018.
2 Key Picks in the Retail Space
Dollar General (DG - Free Report) delivered an average positive earnings surprise of 2.3% in the trailing four quarters. It has a long-term earnings growth rate of 14.6% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Burlington Stores (BURL - Free Report) delivered an average positive earnings surprise of 15% in the trailing four quarters. It has a long-term earnings growth rate of 18.6% and a Zacks Rank #2 (Buy).
Investor Alert: Breakthroughs Pending
A medical advance is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating substantial revenue, and even more wondrous products are in the pipeline.
Cures for a variety of deadly diseases are in sight, and so are big potential profits for early investors. Zacks names 5 stocks to buy now.
Click here to see them >>