Costco does pay dividends, but not every year and not in the way most large companies do
Costco Wholesale Corporation is a publicly traded company, which means it can pay dividends to people who own its stock. However, Costco does not pay a regular quarterly or annual dividend like many other large retailers. Instead, Costco pays special dividends — one-time payments to shareholders that happen irregularly, sometimes years apart.
The company prioritizes reinvesting profits back into the business: opening new warehouses, upgrading technology, and raising employee wages. This strategy has historically made Costco's stock price grow over time rather than producing steady dividend income for shareholders.
If you own Costco stock or are thinking about buying it, understanding how and when these special dividends happen will help you know what to expect from your investment.
Key Takeaways
- Costco pays special dividends irregularly — sometimes once every few years — rather than regular quarterly payments like most large companies.
- Special dividends are one-time cash payments per share, and the amount varies depending on the company's financial performance and board decision.
- Costco's last special dividend was paid in 2024, but there is no set schedule for when the next one will occur.
- If you want steady dividend income, Costco stock may not be the right choice; the company focuses on stock price growth instead.
- You must own the stock before the ex-dividend date to receive a special dividend payment.
How Costco's special dividends work
When Costco's board of directors decides to pay a special dividend, they announce a dollar amount per share and a payment date. If you own 100 shares, you receive that dollar amount multiplied by 100. The payment is deposited directly into your brokerage account, usually within a few business days of the official payment date.
Special dividends are different from regular dividends because they are not part of a predictable schedule. A company might pay one, then wait three years before paying another. The amount also varies — Costco has paid special dividends ranging from a few dollars per share to over $10 per share, depending on the company's cash position and what the board decides is appropriate.
To receive a special dividend, you must own the stock on or before the ex-dividend date, which is the cutoff date the company sets. If you buy the stock after that date, you will not receive that particular dividend payment. Your brokerage will tell you the ex-dividend date when a dividend is announced.
When Costco has paid special dividends in the past
Costco has a history of paying special dividends, but the timing is unpredictable. The company paid special dividends in 2020, 2021, 2022, and 2024. However, there were gaps between some of these payments, and there is no may provide about when the next one will occur.
The amount of each special dividend has reflected Costco's financial health at the time. During years when the company had strong cash flow and profits, the board chose to return some of that money to shareholders rather than hold it all in reserve or spend it entirely on expansion.
You can find the history of Costco's dividend payments on the company's investor relations website or on financial websites like Yahoo Finance or Seeking Alpha. These sites list the date announced, the amount per share, and the payment date for each special dividend.
Why Costco does not pay regular dividends
Costco's leadership has chosen a different strategy than many other large retailers. Instead of paying a steady quarterly dividend, the company reinvests most of its profits into the business. This means opening new warehouses, upgrading existing locations, investing in technology and supply chain improvements, and raising employee wages and benefits.
This approach has worked well for Costco's stock price over the long term. Investors who bought Costco stock years ago have seen the share price rise significantly. For investors who want growth rather than income, this strategy is attractive. For investors who need regular cash payments from their investments, Costco is not the right choice.
The company's board believes that reinvesting profits creates more value for shareholders over time than paying out regular dividends would. Special dividends are paid only when the board feels the company has more cash than it needs for its growth plans.
What to do if you own Costco stock
If you already own Costco stock, you do not need to do anything to receive a special dividend. Your brokerage will automatically deposit the payment into your account on the payment date. You will receive a notification from your brokerage when a dividend is announced, and you can also check Costco's investor relations website for official announcements.
Keep in mind that special dividends are taxable income in the year they are paid. Your brokerage will send you a tax form (usually a 1099 form) that reports the dividend income, and you will owe taxes on that amount. If you are in a tax-advantaged account like an IRA or 401(k), the dividend is not when ready taxable, but the rules depend on the type of account.
If you are considering buying Costco stock specifically for dividend income, you should know that special dividends are not reliable enough to count on. A better approach is to view Costco as a growth stock and any special dividend as a bonus, not as your primary reason for owning it.
Comparing Costco to other retailers that pay regular dividends
Many other large retailers pay regular quarterly dividends. Companies like Walmart, Target, and Home Depot all pay dividends four times a year on a predictable schedule. If you want steady income from your stock investments, these companies may be a better fit than Costco.
The trade-off is that companies paying regular dividends often have slower stock price growth. They are returning cash to shareholders instead of reinvesting it all in the business. Costco has chosen the opposite path: higher potential stock price growth, but no regular dividend income.
Neither approach is wrong — it depends on what you need from your investment. If you are young and building wealth, growth stocks like Costco may suit you better. If you are retired and need regular income, dividend-paying stocks may be more appropriate.
How to find out about future Costco dividends
Costco announces special dividends through press releases on its investor relations website at investor.costco.com. You can also sign up for email notifications from the company so you are informed as soon as a dividend is announced.
Your brokerage will also notify you when a dividend is declared. If you use a major brokerage like Fidelity, Charles Schwab, or Vanguard, you will see a notification in your account and receive an email about the dividend, the ex-dividend date, and the payment date.
Financial news websites and stock tracking apps will also report Costco dividend announcements. If you follow Costco's stock, you will hear about a special dividend when it happens.
Frequently Asked Questions
How much was Costco's last special dividend?
Costco's most recent special dividend was paid in 2024. The exact amount per share varies, so check Costco's investor relations website or your brokerage account for the specific amount. You can also search for "Costco special dividend 2024" on financial news sites to find the announcement.
Do I have to do anything to receive a Costco dividend?
No. If you own Costco stock on or before the ex-dividend date, the payment will be deposited into your brokerage account automatically. You do not need to take any action. Your brokerage will handle everything.
What is the difference between a special dividend and a regular dividend?
A regular dividend is paid on a set schedule, usually four times per year, and the amount is often consistent. A special dividend is a one-time payment that happens irregularly and can vary in amount. Costco pays special dividends only, not regular ones.
Can I lose money if Costco stops paying special dividends?
Special dividends are a bonus, not a may provide part of owning Costco stock. If the company stops paying them, your stock value could still grow or fall depending on the company's performance and the broader market. Do not buy Costco stock expecting special dividends to continue — buy it if you believe the company will grow over time.
Do I owe taxes on a Costco special dividend?
Yes, special dividends are taxable as ordinary income in the year they are paid, unless you hold the stock in a tax-advantaged account like an IRA. Your brokerage will report the dividend on a tax form, and you will owe taxes on the amount. Talk to a tax professional if you are unsure how to report it.