Does Costco Stock Pay Dividends? What You Need to Know

Costco pays dividends, but only to shareholders who own the stock

Costco Wholesale Corporation does pay dividends to people who own its stock. The company has paid dividends every year since 1983, and it raises the dividend amount regularly — most years it increases the payout. However, Costco is not a high-dividend stock. The annual dividend yield (the yearly payout divided by the stock price) typically sits between 0.7% and 1.2%, meaning you earn less in dividends than you would from a savings account or bond.

You receive dividends only if you own Costco stock on the record date, which is the day the company sets to determine who gets paid. If you buy the stock after that date, you will not receive the next dividend — you will receive the one after that. Dividends are usually paid four times a year, in March, June, September, and December.

Key Takeaways

• Costco has paid dividends every year since 1983 and typically raises the payout amount annually.
• The dividend yield is usually between 0.7% and 1.2%, which is lower than many other dividend-paying stocks.
• You must own the stock on the record date to receive the next dividend payment.
• Dividends are paid four times per year, and you can receive them as cash or reinvest them automatically.

How much Costco pays in dividends

Costco's dividend amount changes, so there is no single number that applies to all investors. The company typically raises its dividend once per year, usually in the fall. For example, if Costco paid $0.50 per share per quarter, that would be $2.00 per year — but next year it might raise that to $0.55 per share per quarter, or $2.20 per year.

To find the current dividend amount, check Costco's investor relations website or your brokerage account. Your broker will show you the next payment date and the amount per share. Multiply the per-share amount by the number of shares you own to see what you will receive.

Because Costco's stock price is high (typically in the $600 to $900 range), even a modest per-share dividend can add up if you own many shares. But the yield remains low because the stock price is so high relative to the annual payout.

Why Costco's dividend yield is lower than other stocks

Costco is a growth company, not a yield company. It reinvests most of its profits into the business — opening new warehouses, improving technology, and raising employee wages — rather than paying out large dividends. This strategy has made the stock price rise significantly over decades, which benefits shareholders through capital gains rather than dividend income.

Companies that pay high dividends are often mature businesses with stable earnings and fewer opportunities to grow. Costco still has room to expand, so it keeps cash in the business. If you buy Costco primarily for dividend income, you will be disappointed. If you buy it for long-term growth with some dividend income on top, it fits that goal better.

How to receive your Costco dividends

When you own Costco stock through a brokerage account, your broker handles dividend payments automatically. On the payment date, the cash appears in your account. You can then spend it, reinvest it, or leave it sitting in cash.

Many brokers offer dividend reinvestment plans, often called DRIPs. If you enroll in a DRIP, your broker will automatically use each dividend payment to buy more shares of Costco stock (usually at no commission). This compounds your investment over time — you earn dividends on the new shares, which then buy more shares, and so on. Check your broker's website to see if they offer this option and how to turn it on.

If you own Costco stock through a retirement account like an IRA or 401(k), the same rules apply. Dividends land in the account and you can reinvest them or leave them as cash.

Tax treatment of Costco dividends

Costco dividends are taxed as may have access to dividends in most cases, which means they receive favorable tax treatment. may have access to dividends are taxed at lower rates than ordinary income — the rate depends on your overall income and filing status, but it is typically 0%, 15%, or 20%.

To may have access to for this lower rate, you must have owned the stock for at least 60 days around the dividend payment date. Since Costco pays dividends four times per year and you hold the stock for months or years, this requirement is almost always met.

Your broker will send you a 1099-DIV form each January showing how much you received in dividends. You report this on your tax return. If you reinvest dividends through a DRIP, you still owe tax on the amount reinvested — the IRS treats it as income even though you did not receive cash.

Comparing Costco to other dividend stocks

If dividend income is important to your investment plan, Costco is not the best choice. Stocks in utilities, real estate investment trusts (REITs), and consumer staples often pay yields of 3% to 6%. Costco's 0.7% to 1.2% yield is much lower.

However, Costco offers something those high-yield stocks may not: strong stock price growth. Over the past 10 and 20 years, Costco's stock has risen much faster than utility stocks or many REITs. Your total return — dividends plus stock price appreciation — may be higher with Costco even though the dividend alone is modest.

The right choice depends on what you need. If you need income now, a higher-yield stock or bond fund makes more sense. If you are building wealth for retirement and can wait decades, Costco's combination of modest dividends and growth may suit you better.

What happens to dividends if you sell your stock

If you own Costco stock on the record date, you will receive that dividend even if you sell the stock before the payment date. The dividend belongs to whoever owned it on the record date, not whoever owns it on the payment date.

However, if you sell the stock after the record date but before the payment date, the buyer will not receive that dividend — you will. This is one reason stock prices typically drop slightly on the ex-dividend date (the first day you can buy the stock without receiving the next dividend). The drop usually equals the dividend amount, so there is no real gain or loss for you.

Frequently Asked Questions

How often does Costco pay dividends?

Costco pays dividends four times per year, typically in March, June, September, and December. The exact dates vary each year. Check your broker's website or Costco's investor relations page for the current schedule.

Can I buy Costco stock just to collect dividends?

You can, but it is not an efficient strategy. Costco's dividend yield is too low to justify buying the stock for income alone. You would earn more from a high-yield savings account or bond fund. Costco makes sense if you want both growth and some dividend income.

What is the ex-dividend date and why does it matter?

The ex-dividend date is the first day you can buy Costco stock without receiving the next dividend. If you buy on or after that date, you will receive the dividend after next, not the upcoming one. Your broker will show you the ex-dividend date when you look up the stock.

Do I owe taxes on dividends I reinvest through a DRIP?

Yes. The IRS taxes reinvested dividends as if you received them in cash. You report the full amount on your tax return even though the money stayed in your brokerage account and bought more shares.

Will Costco ever pay a higher dividend?

Costco raises its dividend most years, but the yield will likely stay low because the company prioritizes growth over income. If you need higher dividend income, consider stocks in sectors like utilities or REITs instead.