History Says This Is the Amount of Yearly Dividend Income a $20,000 Investment in Costco Stock Could Generate By 2036 (Without Even Considering Special Dividends).
Costco has increased its dividend annually for more than two decades, and at a surprisingly rapid clip.
Overview
Costco (NASDAQ: COST) is a fast-growing retailer that uses a club store model. Perhaps the best example of the company's growth is its dividend, which has generally increased at a double-digit rate every year. In fact, the worst annual increase over the past decade came in 2020, during the coronavirus pandemic. The dividend grew "just" 7.7% that year, which is still well above the historical inflation rate. What can this type of growth do for a dividend investor's income stream in a decade? Magical things and a specific example will help explain it.
If you invested $20,000 in Costco today, you could buy 22 shares as of this writing. Each of those shares would entitle you to a quarterly dividend of $1.47. So, some simple math shows that the annualized dividend per share is $5.88. Those 22 shares provide an income stream of just over $129. That's the starting point with this globally dominant retailer.
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Originally published at www.fool.com.