Costco Wholesale's (COST) recent regulatory filing to issue debt indicates the company could be preparing to declare a special dividend, Truist Securities said Thursday.
On Wednesday, the warehouse club operator filed a shelf registration statement with the US Securities and Exchange Commission covering the potential sale of debt securities from time to time.
"A special dividend may be coming soon, which we estimate could be around $30 or a (roughly) 3% yield," Truist Managing Director Scot Ciccarelli said in a note to clients Thursday.
Costco has roughly $19 billion in cash, with more than $13 billion in net cash, prompting the brokerage to speculate about a special dividend.
"We think the only reason the (company) would need to raise debt capital would be to fund a special dividend, which is something (it) has done every few years in the past as way to enhance shareholder value," Ciccarelli said.
Assuming a $30 dividend, it would equate to a little more than a $13 billion payout, Truist said. The company could fund $8 billion to $10 billion of that amount with debt and the remaining with cash, according to the note.
Also on Wednesday, Costco reported net sales of $24.01 billion for May, up nearly 15% year over year. Consolidated comparable sales rose 12.5%, with the US seeing a 13.7% gain.
"Costco continues to underscore its ability to cater to its increasingly value-driven consumer base that's undergoing greater pressure with its extreme value proposition," Ciccarelli said Thursday. "May's results are tracking ahead of our (fourth-quarter estimates) so far, but our estimates remain unchanged as comparisons get more difficult throughout the quarter."
Costco shares were up 0.9% in late-afternoon trade. So far in 2026, the stock has jumped nearly 16%.
Last week, the company's fiscal third-quarter revenue topped market estimates buoyed by its gas business amid high fuel prices, though earnings fell short of expectations.
Price: $971.94, Change: $+10.10, Percent Change: +1.05%
