Is Costco a Great Dividend Stock?
Defining a great dividend company clearly involves some subjective criteria. For me, it has to meet two basic standards. A company has to show that it can continue paying dividends in different economic environments. It also has to show that it can raise its dividend consistently over time.
Costco Wholesale (NASDAQ: COST) has built a unique shopping experience for its warehouse club members by offering a wide range of high-quality products at attractive prices and doing so in a convenient manner. But are these good business practices enough to generate the earnings that eventually create dividend greatness? Let's take a closer look.
To answer this question, one needs to dig into the financials of the company, but in this case, it first helps to understand Costco's business model. Costco is not a typical retailer. It charges members an annual fee to shop at its warehouse clubs. Pay the fee and you can buy virtually anything on the store shelves. It sells many of the items in bulk, allowing it to charge lower unit prices than many other retailers.
Source Fool.com
