Why Costco Wholesale Corporation (COST) Offer Stability in Volatile Markets for Retail Dividend Stocks

Costco Wholesale Corporation (NASDAQ:COST) is included among the 12 Best Retail Dividend Stocks to Buy Now.

Photo by NeONBRAND on Unsplash

Costco Wholesale Corporation (NASDAQ:COST) is the leading warehouse-club retailer, built on a membership model that combines low-margin, high-volume retail sales with recurring, high-margin membership fees and strong customer loyalty.

Costco Wholesale Corporation (NASDAQ:COST) continues to deliver steady results and consistent traffic, proving its ability to grow in various economic conditions. In its most recent quarter, revenue increased 8% from the prior year, while comparable sales rose 5.7% (or 8% when excluding fuel prices and currency effects). E-commerce remained a key growth driver, climbing 14.8% during the period. Operating income also improved, and earnings per share grew to $4.28 from $3.78 a year earlier, reflecting both sales growth and cost control. Membership fee income, a critical part of its model, rose 10% to about $1.24 billion.

Costco Wholesale Corporation (NASDAQ:COST)’s dividend history makes it a reliable investment option for income investors. The company currently offers a quarterly dividend of $1.30 per share and has a dividend yield of 0.55%, as of September 22. It has raised its payouts for 21 years in a row.

While we acknowledge the potential of COST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 11 Cheap Quarterly Dividend Stocks to Buy Right Now and 10 Safest High Dividend Stocks to Buy Now.

Disclosure: None.