Costco Stock Rises Near 52-Week High: What's Going On?

Costco Wholesale Corp. (NASDAQ:COST) shares are rising Thursday, extending Wednesday’s gain and trading near its 52-week high after its $30 special dividend announcement.

• Costco Wholesale shares are testing new highs. Why is COST stock breaking out?

Costco Stock Extends Gains Near 52-Week High

Costco shares are building on Wednesday’s advance and sit within about 0.3% of their 52-week high of roughly $1,096.50, with the range starting near $844.06. Wednesday’s gain came after Costco said it will distribute a one-time dividend of $30 a share, about $13.3 billion in total.

Shareholders on the books when trading closes Nov. 24 will be paid Dec. 4. The distribution is double Costco’s January 2024 special dividend of $15 a share, which cost roughly $6.7 billion.

The board also approved a fresh buyback authorization worth up to $4 billion, valid through November 2030. It supersedes a 2023 program set to lapse in January 2027, and Costco repurchased $3.1 billion of stock under that older plan.

Mizuho Highlights Costco’s Cash Generation

Mizuho analyst David Bellinger maintained its Outperform rating while lifting the target to $1,100 from $1,065. Bellinger had expected a dividend between $18 and $20, so $30 far exceeded forecasts. Over and above the quarterly dividend, the special payment is worth around 2.8% in added yield. A separate buyback returns even more cash beyond the $13.3 billion. Bellinger described Costco’s cash position as “a high-quality problem.”

Bellinger says ongoing free cash flow lets Costco address retail media, rapid delivery and online sales, where gaps are perceived. Bellinger also wants this to prove Costco’s final special dividend.

COST Shares Are Moving Higher

COST Price Action: Costco shares were up 0.86% at $1096.95 at the time of publication on Thursday. The stock is trading near its 52-week high of $1096.50, according to Benzinga Pro.

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