Costco CFO Declines Special Dividend Despite Matching 2023 $10 Payout, Stock Split Likely
Costco’s CFO declined to confirm a special dividend despite cash balances matching 2023 levels that funded a $10 per-share payout, and said capital will focus on new warehouses and digital expansion. Shares near $1,000 carry a forward P/E of 48.6x, well above peers, making a stock split increasingly likely.
1. CFO Addresses Special Dividend Questions
During the second-quarter earnings call, Costco CFO Gary Millerchip was asked if the company plans another special dividend now that cash balances mirror the levels present in early 2023. He emphasized that investment in new warehouses, depot expansions and digital initiatives remains the top priority over additional one-time payouts.
2. Cash Position and Capital Allocation
Costco’s cash pile has reached the same thresholds that funded the $10 per-share special dividend in 2023. Management reiterated that capital expenditures will continue targeting network expansion and e-commerce growth opportunities, reflecting confidence in long-term return on invested capital.
3. Elevated Valuation and Split Considerations
Shares trade near $1,000 with a forward price-to-earnings ratio of 48.6x, significantly above its five-year average and peer group. This lofty valuation has heightened speculation that Costco may execute a stock split to improve share accessibility.
4. Stake Increase by Major Investor
B. Metzler seel. Sohn & Co. AG boosted its position in Costco by 1.5%, acquiring an additional 767 shares to reach a total holding of 51,274 shares during the latest reporting period. This move underscores continued confidence from institutional holders.