Costco dividend: payment and coverage
Costco's dividends per share rise from $6.05 to $7.20 in the base forecast. Costco's free cash flow of $9,382 million covered dividends of $2,458 million.
How much does Costco pay per share?
Base dividends per share rise from $6.05 to $7.20. The bear case holds at $5.54 before reaching $5.65, while the bull case reaches $7.90. The base path is below the recent dividend-growth rate because Costco must fund expansion. Free cash flow of $9,382 million covered dividends of $2,458 million, but planned capital spending is $7,500 million.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 10,178 (9,115 / 10,504) | 10,976 (9,191 / 11,813) | 11,857 (9,430 / 13,273) |
| Shares (millions) | 443 (444 / 443) | 443 (445 / 442) | 443 (445 / 441) |
| Dividends per share | 6.05 (5.54 / 6.20) | 6.60 (5.54 / 7.00) | 7.20 (5.65 / 7.90) |
| Price to earnings | 39.00 (32.00 / 44.00) | 36.00 (29.00 / 43.00) | 33.00 (26.00 / 42.00) |
Is Costco's dividend covered by its cash?
The ordinary pattern returned afterward. In fiscal 2026, Costco paid $2,458 million in dividends and spent $848 million on buybacks. A buyback uses cash to repurchase the company’s own shares, so its value depends on the price paid and on whether employee share awards offset the reduction. The $4 billion authorization is permission to spend, not a requirement to exhaust it.
Free cash flow is operating cash left after capital spending. Costco generated $15.825 billion from operations and spent $6.435 billion on property and equipment in FY2026, leaving $9.390 billion. That produced a 2.2% free-cash-flow yield. If capital spending rises to $7.5 billion while operating cash stays unchanged, free cash flow falls by $1.065 billion. The same cash cannot fully fund new warehouses and be distributed immediately.
| Aug 2026 | Aug 2025 | Sep 2024 | Sep 2023 | Aug 2022 | |
|---|---|---|---|---|---|
| Free cash flow | 9,382 | 7,837 | 6,629 | 6,745 | 3,501 |
| − Dividends paid | 2,458 | 2,183 | 9,041 | 1,251 | 1,498 |
| − Share buybacks | 848 | 903 | 700 | 676 | 439 |
| = Free cash flow not paid out | 6,076 | 4,751 | 4,818 | 1,356 | |
| Cash and short-term investments | 21,301 | 15,284 | 11,144 | 15,234 | 11,049 |
| Paid out, % of free cash flow | 35.2% | 39.4% | 146.9% | 28.6% | 55.3% |
What could change Costco's dividend?
Through FY2027 to FY2029, higher wages, merchandise costs, or fulfillment costs would pressure margins. A reversal of supplier-payment benefits would add to that pressure, while the $7,500 million capital plan could reduce cash available for repurchases.
The bull case would gain credibility if traffic and renewal remain strong, new and infill warehouses mature productively, and international sales accelerate. Digital growth would matter most if it increased purchases without materially reducing fulfillment economics.
What is Costco's dividend yield today?
| Today (Oct 11, 2026) | |
|---|---|
| Share price | 946.92 |
| Market value (calculated) | 419,608.04 |
| P/E, last 12 months (calculated) | 45.6x |
| Free cash flow yield (calculated) | 2.2% |
| Real free cash flow yield (calculated) | 2.0% |
| Dividend yield (calculated) | 0.6% |