Costco’s Regular Dividend Looks Tiny. Its Special Dividends Tell a Different Story

The regular dividend of Costco Wholesale (NASDAQ:COST | COST Price Prediction) yields about 0.54% at today’s price, a number that barely matters for income investors. Jim Cramer pushed a different view on CNBC: “It’s undervalued. We just got a $30 special dividend and a stock repurchase.” Barron’s also ran a piece today calling Costco’s special dividend one reason the stock works as shelter from AI chaos. One note: Costco’s published dividend schedule still lists the $1.47 regular payment, due November 13, 2026, as its latest distribution. Until record and payment dates show up there, the $30 figure is Cramer’s account.

How Costco Pays Shareholders

Costco pays a regular quarterly dividend that rose to $1.47 from $1.30, up about 13%. That works out to $5.88 a year. The bigger payouts come irregularly:

• $7 per share in December 2012
• $5 per share in February 2015
• $7 per share in May 2017
• $10 per share in December 2020
• $15 per share paid January 12, 2024

The 2024 special by itself came to about 2.6 times the current annual regular payout.

Membership Fees Pay for the Big Checks

Membership fees are what make these payouts possible. In the fourth quarter, membership fee income reached $1.85B, up 7.3%. Costco has 150.4M cardholders, and the worldwide renewal rate stands at 89.8%. For fiscal 2026, free cash flow came in at $9.39B and cash grew to $20.21B, up 42.69% year over year.

Store expansion competes for that cash. Gary Millerchip, the CFO, said:

“For fiscal year 2027, we are planning approximately $7.5 billion in capital expenditure… Beyond fiscal year 2027, we would expect to see a slowing in the rate of capital expenditure growth.”

CEO Ron Vachris backed the spending: “We’re confident in the return on investment in all the buildings that we open.” On the call, management did not commit another special dividend.

Walmart and BJ’s Return Cash Differently

With no specials, Walmart (NASDAQ:WMT) pays a steady quarterly dividend of $0.2475. Its yield is about 0.75%, and it has $25.1 billion left on its buyback approval. BJ’s Wholesale Club (NYSE:BJ) pays no dividend. It bought back $330.7 million of stock in the first half and held just $29.98 million in cash. CEO Bob Eddy said the company remains “committed to investing in growth for the long term.” Of the three, only Costco has a record of paying one-time special dividends.

Valuation Is the Catch

Costco shares trade at $1,079.87. They are up 25.96% year to date and 14.21% over the past month. Against fiscal 2026 EPS of $20.76, the stock trades at roughly 52x earnings, compared with Walmart’s 46x. A special dividend worth a small piece of the share price can disappear in one bad trading week when the stock has a multiple that high.

What Income Investors Should Know Before the Next Payout

Costco’s payout mix leans toward total return over predictable income. The regular dividend keeps growing, while the special payouts come without a schedule and depend on how much cash is left after expansion. Two things to track: the cash balance and whether capital spending growth slows after fiscal 2027, as Millerchip said it would. If both hold, Costco will likely have room for more special dividends. The 52x multiple suggests investors already expect much of that.

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