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Exclusive Story
Is Costco Preparing Another Special Dividend This Year?Author: Dan Schmidt. First Published: 5/8/2026. 
Key Points
- Costco's historical pattern of paying special dividends every two to three years suggests another payout could be announced during the fiscal Q1 2027 earnings report.
- With more than $16 billion in cash, Costco has sufficient funds to support a special dividend without issuing stock or debt.
- COST shares have risen around 16% year-to-date and show improving technical momentum, with the RSI trending upward and price holding above key moving averages.
- Special Report: Elon Musk already made me a “wealthy man”
It’s hard to think about dividends with the S&P 500 setting new highs, but Costco Wholesale Corp. (NASDAQ: COST) doesn’t offer your typical quarterly payout. Instead, the company has a history of paying special dividends to shareholders, typically announced without warning during an earnings report.
Still, there’s a pattern behind Costco’s special payouts, and evidence is building that another one could arrive this year. Why the Next Costco Special Dividend Could Come Later This YearCostco has several traditions that keep it in the upper echelon of the retail sector: the high-quality Kirkland Signature brand, the $1.50 hot dog-and-soda combo, and the periodic special dividend paid to shareholders. Management first paid the special dividend in 2012, announcing a one-time $7-per-share payout to common stockholders that required approximately $3 billion in cash. The company has paid a special dividend every few years since, with the most recent payout of $15 per share in January 2024. The special dividend is paid in addition to the standard dividend, which yields 0.58% and is paid quarterly. While the company has yet to make any announcements, there’s strong evidence that the next special dividend could be coming later this year: Historical Pattern: An “Every Few Years” RhythmAfter the first special dividend in 2012, Costco paid special dividends again in 2015, 2017, 2020, and 2023. While five data points aren’t exactly a treasure trove, they do suggest special dividends are paid about every 2.75 years. The last special dividend was announced during fiscal Q1 2024 earnings in December 2023, which means the upcoming Q1 2027 report later this year would fall within the typical timeframe for another special dividend announcement. Strong Balance Sheet: Cash Matters More Than TraditionCostco typically doesn’t use debt or stock issuance to fund special dividends. The previous payout in 2024 required $6.7 billion and was funded entirely from cash, so the company only announces them when its balance sheet is strong enough to support the payment. As of fiscal Q1 2026, Costco is sitting on about $16.22 billion in cash and cash equivalents, roughly double what it held before the 2023 special dividend announcement. A payout of $20 per share would require about $9 billion, which could easily be absorbed without issuing stock or debt. Operating Momentum: Comps Reaccelerated in MarchSales growth is the best way to replenish the cash pile after a special dividend, and Costco once again has revenue momentum thanks to a new catalyst. March comp sales were up 9.4% year-over-year (YOY), well above the 31-week average of 7.2%. One major catalyst for sales growth was the Strait of Hormuz closure, which has driven gas prices to multi-year highs. High gas prices are typically bullish for warehouse clubs with gas, such as Costco and BJ’s Wholesale Club Holdings Inc. (NYSE: BJ), which often see membership sign-ups increase as consumers become more cost-conscious about fuel. However, hurdles to a special dividend remain. COST stock still trades at 50x forward earnings, which is uncomfortably high for a company with 3% net margins that remain vulnerable to tariffs. But Costco has plenty of cash to support another special dividend, and the timing aligns with previous payouts. If the next special dividend comes this year, it will likely be announced during the fiscal Q1 2027 earnings report. Daily Chart Shows Momentum Building Despite Rangebound TradingBuying a stock in anticipation of a special dividend makes little sense if the shares are in a downtrend, but COST is showing signs of breaking out. Investors got an early-2026 surprise when the stock posted gains in 12 of 14 days at the start of the year, breaking out of a six-month downtrend. COST shares are up around 16% year to date (YTD), but the stock is still more than 5% below its February 2025 all-time high of $1,076 and has struggled to break out of a tight trading range. Even so, this could be a lengthy consolidation period before the next move higher, a scenario that is becoming increasingly likely based on technical signals. 
The January winning streak pushed COST back above the 50-day and 200-day moving averages for the first time since August, a move that often signals the start of a sustainable rally. While the Golden Cross is often a lagging indicator, the stock now appears to have strong support along the 50-day moving average as the price consolidates. The Relative Strength Index (RSI) has also been trending upward since early March and appears poised to move into bullish territory above 50. Special dividend or not, COST shares appear to finally have technical momentum on their side ahead of the anticipated fiscal Q3 2026 earnings release on May 28. |
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