Costco offers increasing dividends but with low yield and high valuation, potentially leading to a pullback.

From Nasdaq.: 2025-03-02 05:04:00

Costco Wholesale (NASDAQ: COST) offers a dividend that has increased annually since 2004, with a recent $15-per-share special dividend in January 2024. However, at a 0.4% dividend yield, it falls below the S&P 500 average of 1.25%. While Costco’s stock has seen significant growth, with a P/E ratio at an all-time high of 62, the low dividend yield may not attract income or growth investors. Analysts predict only 13% annual profit growth for fiscal 2025, possibly leading to a pullback in the stock price.

Overall, Costco remains a strong retailer, but with a low dividend yield and high valuation, investors may find better returns elsewhere. The Motley Fool Stock Advisor team did not include Costco in their list of the 10 best stocks to buy now, suggesting other options for potential higher returns.



Read more at Nasdaq.: Costco Is a Dividend Stalwart. Should You Add It to Your Portfolio?